GCC Petrochemical Industry - The Annual GPCA Forum · PDF file12/6/2016 ·...

GCC Petrochemical Industry

Diversification – Specialty Chemicals

David Lines - Principal

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Agenda

Section 1

Specialty Chemicals definition

Section 2

Specialty Chemicals in the GCC currently

Section 3

Potentials for GCC future diversification?

1 GPCA 11th Annual Conference (V05) 12/6/2016

Section 1

Specialty Chemicals Definition

2

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3

BASF – definition of commodity versus specialty

GPCA 11th Annual Conference (V05)

Customer service to provide innovative technical solutions can be important component of the value

provided by specialty chemical producers. Products may be less capital intensive and cost sensitive,

although as competition increases then cost competitiveness may become more important

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4

Market differentiation for Specialty Chemicals


Cost Leadership Average product offered at a low cost to the broadest possible market. Economies of scale result in cost savings

Cost Focus Strategy of offering average product at low cost to a specific customer group. Customer relationship depends on the cost of the product and a unique connection with a customer

Product Differentiation Strategy focuses on offering a unique product to the broadest possible market. Product offering necessitates continuous innovation in light of the highly competitive market sources

Differentiation Focus Strategy focuses on offering unique product to specific customer group Customer relationship depends on the uniqueness of the product and the way the customer is served

Cost Differentiation

Basis

of

Ad

van

tag

e

Hig

her

Ben

efi

ts

E

qu

al

Ben

efi

ts Scope of Activities

Broad Market Narrow Market

Section 2

Specialty Chemicals in the GCC Currently

5

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Intermediates and Specialty Chemicals in the GCC

currently, still vastly underdeveloped

Basic Chemicals

Isobutanol

Caustic Soda

Acetaldehyde

Calcium Chloride

Acetic Acid

Various Acids

Cumene

Phenol

VAM

LAO

2-EH

Ethylene Oxide

Propylene Oxide

Intermediate Chemicals

DMF

Hexamine

Paraformaldehyde

Pentaerythirtol

Sodium Formate

Detergent Alcohols

BDO/THF/GBO

Ethyl Acetate

Butyl Acetate

MMA

DMA

Maleic Anhydride

Acetic Anhydride

Acrylic Acid

Alkyl Chloride

Specialty Chemicals

DOP & DIOP

Ethylamine’s

SNF/SMF

BPA

Ethoxylates

Ethanolamines

TDI/MDI

Polyether Polyols

Butyl Glycol Ethers


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Uncertain times – but product differentiation & synergies

with facilities are robust within the specialty chemicals sectors

Size

Location

Configuration

Integration

Capture economies of scale

Cost advantage/product differentiation

PARAMETER KEY OBJECTIVES

Access to low cost feedstocks/ deficit

markets

Synergies with adjacent facilities

GPCA 11th Annual Conference (V05) 7 12/6/2016

Section 3

Potentials for GCC future diversification?

8

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Commitment from SABIC, Saudi Aramco, MEIM and others

are driving the development of the specialty chemicals industry in the GCC

9 GPCA 11th Annual Conference (V05)

2000 2010 2015 2020 2030

Continued

substitution of

sophisticated

products

Export to

GCC

substitution

of Import

Export

to

MENA

Firm

Commitment

to Specialty

Chemicals

Export

Globally

12/6/2016

RCJY Yanbu, Jubail I and Jubail II

need to be fully integrated/utilized

to attract further investment and

have a platform for maximising

efficiencies and profitability,

benchmarking against e.g.

BASF Ludwigshafen or

Jurong Island Singapore

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10

Sadara will be the first complex in the GCC to crack naphtha. The project will have a

differentiated product slate as 14 of the 26 products will be new to GCC. New products

streams from Sadara will provide opportunities for downstream industries


Saudi Aramco Shell

Refinery Company

(SASREF)

Saudi Aramco Total

Refining &

Petrochemical

Company (SATORP)

Single Mixed Feed

Cracker

Ethylene

Propylene

C4’s

Aromatics Hydrogenation

& Extraction

Sadara Clusters:

SABIC

Linde

Others

Ethane

C2

Naphtha

C5-C12

Benzene

Toluene

Plastics

LLDPE & HDPE

Elastomers

LDPE

Chemicals

Propylene Glycols (PG)

Polyols

Butyl Glycol Ethers (BGE)

Ethanolamines (EDA)

Ethyleneamines (EAE)

Isocyanates

Polymeric Methylene

Diphenyl Diisocyanate

(PMDI)

Toluene Diiosocyanate (TDI)

40%

60%

Saudi Aramco

Natural Gas Grid

SASREF

Hydrocarbons Dedicated Off-

takers* via

PlasChem Park

RO Membranes

PU formulation

systems house

Coating additives

Oil & Gas Field

chemicals

Brake fluids

Hygiene films for

diapers

Hydrocarbon

resins

PU insulation,

adhesives and

sealants

Chemical

intermediates

for; water

treatment, home

and personal

care,

construction and

detergents.

* These are publically announced projects by Sadara PlasChem Park

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11

Ethylene Oxide Value Chain – first availability of EO for

downstream projects in the GCC


Primary Alcohol Ethoxylates

Ethylene Glycol and Higher Glycols

Ethanolamines

Glycol Ethers

Alkylalkanolamines

Alkyl Phenol Ethoxylates

Polyethylene Glycols

Polyols, Polyalkylene Glycols

1,3-Propanediol

PET Bottles, PET Film, PET Fiber, Antifreeze, Heat Transfer Fluids

Detergents, Gas Purification, Herbicide Intermediate, Textiles, Metal Cleaning

Coatings, Inks, Cleaners, Insecticides, Herbicides, Solvents

Pharmaceuticals, Water Treatment, Coatings, Gas Treatment

Surfactants, Detergents, Antioxidants, Emulsifiers

Surfactants, Cleaners, Laundry Detergents, Degreasers

Lubricants, Chemical Intermediates, Processing Aids, Surface Releases

Polyurethanes, Rigid/Flexible Foams, Adhesives, Elastomers

Coatings, Adhesives, Coolants, Heat Transfer Fluids, Polyurethanes, UPR

Water

Ammonia

Alcohols

Alkyl Amines

Alkyl Phenols

Primary Linear Alcohols

Ethylene Oxide

Propylene Oxide

H2, CO

Ethylene Oxide

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PlasChem is located next to Sadara and will have an

industrial park for chemical and conversion industries PlasChem Park in Jubail

To promote downstream industries and

investment in Saudi, the Royal Commission for

Jubail and Yanbu (RCJY) cooperated with Sadara

to create a world-class industrial park for chemical

and conversion industries called “PlasChem

Park”.

The park has a total area of twelve square

kilometre and is located in Jubail Industrial City II

next to Sadara’s new manufacturing complex.

With complete focus on chemical and conversion

industries PlasChem will make direct or indirect

use of Sadara’s products and raw materials from

other suppliers.

PlasChem will consist of three main units: the

Value Park (ready 2017 and currently 20% full),

the Chemical Park and the Conversion Park

(ready 2020).

12/6/2016 GPCA 11th Annual Conference (V05) 12

Valu

e P

ark

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Continued low-oil price environment will undermine the level of investment in the

downstream development of the speciality chemicals industry in the GCC.

Increased refinery petrochemical integration focus with a broader range of feedstocks will be

a major area of focus for the GCC.

Economic growth in GCC, whilst still robust, will not reach critical mass for key industry

segments (e.g. automotive, consumer goods, FMGC, etc.).

Major government support will be required to attract both local and international investment.

Iincentives for inward investment will become more readily available.

Saudi Arabia for specialty chemicals and the U.A.E. for technology driven sectors are examples

for continued future support

Like the Singapore EDB, GCC governments will invest directly in projects (e.g. TAQA in Saudi

Arabia).

The GCC specialty chemicals sector will continue to be a ‘PUSH’ market, there will be risks

were products will have to be exported before the local industry development reaches critical

mass.

What can we expect to see in the GCC Specialty

Chemical industry over the next decade?


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