First specialty oil field chemicals manufacturing reaction plant in Saudi Arabia

Representatives from Saudi Aramco, Halliburton, Sadara, Fluor, and the Royal Commission of Jubail recently gathered to mark the groundbreaking of a manufacturing plant to be built by Halliburton at the ethylene oxide/propylene oxide (EO/PO) cluster of the PlasChem Value Park at Jubail Industrial City II.

The new facility — expected to be operational by the end of 2020 — will be the first specialty oil field chemicals manufacturing reaction plant in Saudi Arabia, and will initially create approximately 100 jobs. Engineering, procurement, and construction (EPC) of the plant will be carried out by the Fluor Corporation, which was awarded the contract in the last quarter of 2018, after completing the front end engineering and design of the facility. Fluor will lead the EPC work from its offices in al-Khobar.

“Today is about looking forward,” said Mohammed Y. Al Qahtani, Saudi Aramco senior vice president of Upstream, elaborating on how the project and those that follow will be drivers in transforming the Kingdom’s economy. “As the Kingdom continues to expand and diversify its economy in line with Saudi Vision 2030, it is projects like this that brings this vision to reality. These types of projects will transform Saudi Arabia from being an importer of specialty products to an exporter.”

Halliburton will manufacture process treatment chemicals at the facility, which in turn will be sold primarily to Saudi Aramco for use in upstream and downstream drilling and extraction activities.

Production will be fueled by a steady supply of EO and PO from Sadara via an extensive pipeline network currently under construction. The network — comprising two 7-kilometer special material pipelines — is designed to distribute products to multiple customers within the cluster, and is expected to be completed alongside the new plant’s commissioning in 2020.

The manufacturing of these specialty products in the Kingdom also contributes to the goal of meeting the key benchmark of Saudi Aramco’s iktva program, designed to boost local employment.

“This will be done with Saudi talent in line with iktva’s 70% benchmark,” said Al Qahtani. “To date, we have achieved an overall localized content level of 51%. Working to reach our goal, the support of partners such as Halliburton, through projects like this, is a clear sign of the commitment that will get us there. This project is a win-win-win for Saudi Aramco, Halliburton, and the Kingdom.”

The 12-square-kilometer (4.6 square-mile) industrial park in Jubail-II, situated adjacent to Sadara, SATORP, and the future SATORP II expansion (Amiral), is one of the Kingdom’s dedicated downstream chemicals and conversion industrial parks. The development of PlasChem is led by the Royal Commission of Jubail, with the support of multiple stakeholders including Sadara, together with its shareholders Saudi Aramco and Dow Chemicals, as well as other government entities.

PlasChem is envisioned to house and provide services to numerous downstream conversion industries ranging from reactive chemicals, polyurethanes, paints and coatings, and the diverse world of plastics.