SABIC affiliate Saudi Kayan starts trial runs at new Butanol plant

Saudi Kayan, a manufacturing affiliate of SABIC, confirmed that it has started trial runs at its new massive joint venture butanol plant in Jubail.

The trial phase, which began on October 20, is expected to last between three to six months, the company said in a statement.

During this period, the plant’s equipment and production efficiency will be tested based on the technical license and implementation contracts.

The plant is designed to produce 330,000 tonnes per year of normal butanol and 11,000 tonnes of mono-butanol once operational.

Butanol is used in industrial products such as paints and solvents and the plant is targeted at supporting the paints and coatings industry in Saudi Arabia.

The project is part of a joint venture involving three partners: Saudi Kayan, the Saudi Acrylic Acid Company and Sadara Chemical Company.

Chairman of Saudi Kayan Omar Al-Amoudi said that under the joint venture, the three partners will have equal shares in the plant’s output, which will be used in downstream industries and sold in international markets.

Saudi Kayan also confirmed that it has completed work on the Butanol project’s export and import units at the King Fahd Industrial Port in Jubail Industrial City, estimated to cost SAR 180m.

The units are meant for shipping the company’s share of production, with the possibility of also exporting the share of the other partners under specific agreements.

The overall project’s financial impact will be reflected in the company’s results after commercial operations begin, the statement said.

“The financial impact is difficult to assess due to its correlation with fluctuating energy prices,” it added.

The project, first announced in 2012, is estimated to have cost around $517m and was billed to become the world’s largest butanol plant and the first in the Middle East. South Korean firm Daelim was awarded the construction contract for the plant in July 2013.

The project was scheduled to be completed by May 2015 and begin trial runs in Q2 2015.