Chevron to begin exporting styrene and polypropylene from Saudi JV

More chemical capacity comes online in the Middle East through joint venture

By Dave Hannon -- Purchasing, 8/18/2008 11:40:00 AM

Jubail Chevron Phillips Co., a joint venture between Chevron and Industrial Investment Group (SIIG), said it will begin production of styrene and polypropylene at its plant in Jubail, Saudi Arabia and have it ready for export by next month.

According to a statement on the SIIG’s web site, “the period prior to the first shipment will be used to buildup inventory. Production quantities will increase during the next three months until the facility reaches full capacity.”

It’s the latest announcement in a continuing flood of petrochemical capacity coming online in the Middle East. Last month, Kevin Swift, chief economist for the American Chemistry Council in Arlington, Va. told Purchasing that “There is a flood of new capacity coming on-stream in the Middle East. That region has a distinct advantage of lower energy costs.” Earlier this month, Reuters reported that Saudi Arabian Mining Co is close to reaching a deal with Sahara Petrochemical Co. to set up a caustic soda joint venture in Saudi Arabia.

The joint venture is the second between SIIG and Chevron. In 1997 the companies started their first plant at Jubail (seen in photo). According to the Chevron Phillips web site, that JV plant produces benzene and cyclohexane.

Reuters reports that SIIG doubled its capital this year to set up with Chevron Phillips another petrochemicals joint venture firm it called Petchem. Chevron Phillips will hold 35% of Petchem, SIIG has said.

See also: Energy prices accelerate the move to the Middle East including a list of recent new petrochemicals capacity additions and expansions in the Middle East.

See also: Buyers follow pipeline back to the Middle East, a buyer’s guide to doing business in the Middle East.