Sadara Chemical and Rufayah Chemicals Company (RCC) have signed a long-term supply agreement under which Sadara will supply RCC with pygas and pyoil for a new complex planned for PlasChem Park, the industrial cluster in Jubail Industrial City II, Saudi Arabia. Financial terms of the deal, which runs for 20 years, have not been disclosed.

RCC’s complex will use the feedstock from Sadara, and potentially other liquid crackers in the kingdom, to produce a wide range of downstream chemicals such as hydrocarbon resins, isoprene, pure dicyclopentadiene (DCPD), aromatic solvents, premium wash oils, among others. When completed, RCC expects to manufacture 12 different products with an overall capacity of more than 350,000 t/y. A total investment of around $500 million will be spent on the complex, which is projected to go on stream in December 2020.

Expressing his delight that RCC had chosen PlasChem Park to build what will be one of the world’s largest hydrocarbon resins plants, Mohammad Alazzaz, director of Value Park, Sadara, said the complex is the biggest undertaking in the cluster to date, with production serving the growing specialty chemicals industry both in the kingdom and in the wider Middle East/North African region, and filling a gap in local manufacture and supply.

Alazzaz commented:  “We see significant opportunities to enable more local production in the specialty sector, reducing reliance on imported materials especially in applications such as specialty plastics, oil and gas chemicals, construction material, water treatment, home/personal care, comfort market and other applications.”

RCC is a local Saudi company that has been established by Global Company for Downstream Industries (GDI), specifically for using pygas and pyoil, which are generated from cracking naphtha, to produce hydrocarbon resins, among other downstream products. GDI was formed by Riyadh-based consultancy Addar Group to explore business opportunities in various downstream segments including petrochemicals, with the strategy of transforming abundant and competitively priced feedstocks into high value-added products.

Hydrocarbon resins are a key component in adhesives, paints and coatings, inks manufacturing and rubber compounded products. The complex’s other products such as premium wash oils, aromatic solvents and naphthalene will substitute local imports by providing them on a “next-door” basis.

Sadara said PlasChem Park is a key differentiator from other chemical and plastics manufacturing projects in Saudi Arabia in that its unique position enables and supports downstream opportunities in many market segments, attracting diversified investments.