Saudi Sabic Says Evaluating Bids For Ibn Rushd
Sabic expects to decide by the end of this year on bids for the expansion of its affiliate Arabian Industrial Fibers (Ibn Rushd), its chief executive said on Sunday.
Ibn Rushd's complex in Yanbu, on Saudi Arabia's Red Sea coast, produces aromatics, purified terephthalic acid (PTA) which is used in making polyester, and polyester staples.
After the expansion, Ibn Rushd's PTA capacity would rise to 700,000 tons per year (tpy) from 350,000 tpy currently.
The expansion would also increase output capacity of polyethylene terephthalate (PET) to 750,000 tpy from 330,000 tpy as well as boost aromatics capacity to 600,000 tpy from 350,000 tpy.
The expansion comes as Sabic restructured the company and introduced new products, Mohammed al Mady, chief executive officer of Sabic told Reuters.
"We received the bids and we are analyzing them. We expect by the end of this year to reach a decision for this investment," Mady said.
Sabic benefits from access to cheap energy feedstock in the world's top oil exporter, giving it a competitive advantage over global rivals.
Plans to build an acrylonitrile butadiene styrene (ABS) plant at Sabic's fully owned affiliate Petrokemya are ongoing and not cancelled, Mady told reporters.
"At the time, the market was heating up, high cost for that plant, so we reviewed the capacity," Mady told reporters after the company announced third-quarter earnings.
Like other petrochemical producers in the Gulf, Sabic would want to have more gas supplies to expand its products portfolio.
"We have to be realistic. The investment cycle takes time to find the gas ... Sabic is a global company we cannot wait for the gas to come we have to do business either in downstream, in innovation ... until the gas is available," he said.
Sabic and U.S. ExxonMobil Chemical have not taken a final decision yet to invest in the production of synthetic rubber at their joint-ventures Yanpet and Kemya, Mady said.
An executive from ExxonMobil Chemical said last year the plans would cost around $5 billion.
"We are moving to the detailed feasibility study ... we have not reached final decision ... (It is expected) some time early next year," Mady said.
Sabic continues to work with state oil giant Saudi Aramco to identify joint-venture opportunities, Mady said.
