Dow and Aramco Launch Huge Polymer and Other Petrochemicals Project

Dow Chemical has made everyone sit up and take notice when it announced that it will be forming a new $20 billion company with Saudi Aramco, the state-owned major oil company of Saudi Arabia. Andrew Turley of Chemistry World reports the new company, called Sadara, will feature 26 integrated manufacturing units to producing three million tons of chemical products per year. The products include polymers and plastics.

As Alex Tullo explains in his Chemical & Engineering News article, Dow calls the venture the world’s largest chemical project ever undertaken. He gives details about Sadara:

The facility will be centered around a steam cracker that will use ethane and other natural gas liquids from Saudi Aramco as well as locally sourced refinery co-products as feedstocks.

Downstream from the cracker, the partners will have plants to make a myriad of chemicals. A factsheet (PDF) released by Dow reveals some details on the products that Sadara will be making. Among them is polyethylene, the most widely-made plastic. Its importance is highlighted by Dow putting money into its production both in Saudi Arabia and Brazil. Polyethylene is used in flexible packaging, and in hygiene and medical, electrical, and telecommunications markets.

Sadara will also produce polyolefin elastomers that go into consumer goods, membranes, transportation, and building and construction applications. Dow expects the cracker and the polyethylene units will start up in 2015. The remaining units will follow a year later.

Sadara will be located in Jubail, an industrial city on the eastern coast of Saudi Arabia. It already hosts petrochemical plants, fertilizer plants, steel mills, and a large port.

As both Turley and Tullo note in their articles, the deal is a win-win for both parties. Sadara will give Dow a strong production base close to its customers in emerging markets. Indeed, Dow expects Sadara to offload 45% of its product volume in the Asia-Pacific region.

Aramco will get a solid revenue stream and diversify away from oil into chemical products. It will also boost the local economy by creating jobs.

Tullo has put together an interesting compilation of information that couldn’t go into his story in a blog post.

Source: “Dow and Aramco launch $20bn chemical project,” Chemistry World, 07/26/11
Source: “Dow Unveils Largest Project Ever,” Chemical & Engineering News, 07/25/11
Source: “Morning Market Snapshot: July 25, 2011,” YouTube

Rajendrani "Raj" Mukhopadhyay is a science writer and editor who contributes news stories and feature articles on scientific advances to a variety of magazines. Raj holds Ph.D. in biophysics from Johns Hopkins University.