Saudi group Tasnee has seen a recovery in demand for petrochemicals since the first quarter of this year, the company's vice chairman and chief executive said on Sunday. “We had seen a dip mainly in the first quarter of this year, however since then prices and demand have both recovered,” Moayyed Al-Qurtas told Reuters on the sidelines of the opening ceremony of an industry event in Dammam. “(Now) we are selling everything we can produce,” Al-Qurtas said, declining to give sales figures. He said demand from Asian markets was stronger than from Europe. He also cited the Middle East, where consumption is growing considerably, as an important market. Prices of polyethylene and polypropylene are now well above $1000, up from around $600 at the beginning of this year. That was reflected in the recovery in crude oil prices, he said. Tasnee is working on submitting a proposal for the multi-billion-dollar Jizan refinery. “The Jizan submission date is not due yet and we are working on this project diligently to be able to submit our proposal,” he said. Earlier this year, the Saudi oil ministry said it aimed to award the contract to build the new refinery, with capacity of up to 400,000 barrels per day, by the end of November. The government unveiled plans for the refinery in 2006 and said it would be 100 percent privately owned with an initial public offering taking place once it was deemed viable. Since then the government had delayed the tender three times. Tasnee has just finished expanding its polypropylene plant from an annual 450,000 tons to 720,000 tons, Saleh Al-Nazha, senior vice president of petrochemicals, said. The company has also launched the first project in Saudi Arabia with Dow Chemical to produce acrylic acid. “As far as our planned, committed and operational projects (are concerned), the feedstock is available and we have never seen a shortage ... we and others would like to get more feedstock to expand more,” Al-Qurtas said. Meawhile, Exxon Mobil Chemical and Saudi Basic Industries Corp (SABIC) joint venture synthetic rubber plants were expected to cost about $5 billion, a senior company executive said on Monday. The project will have a combined production capacity of about 400,000 tons per year of carbon black, rubber and speciality polymers for both domestic and international sales. “We are working on a five billion dollar project for elastomers... it goes into the tire industry which will contribute to the downstream industry that will eventually be developed...like manufacturing tires in this country,” Marc Granier vice-president of Exxon Mobil Chemicals in Saudi Arabia told reporters at an industry conference. The plants, which will be based at the Kemya complex in Jubail and the Yanpet complex in Yanbu, were expected to come online between 2013 and 2014, Granier said. Granier said that they will take a final investment decision with Sabic by 2010 or 2011. “I think we have some key check points with our partner and hurdles we have to overcome, probably we will go through an appropriation of these projects not before end of 2010 or even 2011,” he said. Granier said no contractor has been selected yet for the engineering work which hung on a final investment decision. “We continue to work with Sabic to make the project viable. More information is needed like gas allocations and (to) find ways to reduce the cost below $5 billion.” Exxon and Saudi Aramco are investing $2.5 billion to reduce sulfur from diesel and gasoline at their joint venture refinery in Yanbu, Granier said. “This will not change the capacity of the 400,000 barrel per day (bpd) oil refinery,” he added. The clean fuel project would come on stream in 2011 or 2012, Granier said.
