JEDDAH: Saudi Basic Industries Corp. (SABIC) is switching feedstock to propane and naphtha to make up for a reduced supply of natural gas in Saudi Arabia, a company executive said. SABIC plans to boost its consumption of propane and naphtha to fulfill its expansion plans, Mutlaq Al Morished, the company's executive vice president for corporate finance, said Wednesday. He declined to give details of the expansion. "Every petrochemical company wants to expand at the moment, and we all need gas, but there is not enough gas for all of us," Al Morished said at a conference in Al-Khobar. The Kingdom plans to expand its petrochemical industry to create more jobs for its people. Saudi Aramco is investing about $40 billion in three refining and petrochemical projects that together will add more than 8 million metric tons of production capacity, the company's chief executive officer Khalid Al-Falih said last December. The outlays include about $20 billion for a joint venture plant with Dow Chemical Co and as much as $8 billion to expand Rabigh Refining and Petrochemicals Co, a project with Sumitomo Chemical Co, Al- Falih added. Aramco and Total SA are moving ahead with a $12 billion refinery at Jubail on the Arabian Gulf coast. Aramco is building other refineries at Yanbu on the Red Sea and Jazan in the country's southwest. Some of these plants will supply products such as naphtha and fuel oil for export. Saudi Arabia is expected to spend $31.4 billion through 2015 on improving gas supplies. Of that amount, $24 billion will go toward downstream projects and gas based petrochemicals and fertilizers, according to Arab Petroleum Investments Corp. (Apicorp). Ethane comprised around 73 percent of all feedstock used in the country until 2007, according to the Al Rajhi Capital report. Ethane's share is likely to decrease to 65 percent by 2014 as producers consume more propane, which is more widely available than ethane even though it costs more, the bank noted. "Efforts are underway by Saudi Aramco to boost natural gas production (a) the percentage of natural gas in oil fields in Saudi Arabia has been declining steadily," Al Rajhi said. Aramco plans within this decade to produce natural gas at new fields in northern Saudi Arabia and off the Red Sea coast, Al-Falih said in December.
