Saudi Arabia plans to build a plant able to turn crude directly into chemicals, without first having to refine the oil, Saudi Oil Minister Ali al-Naimi said on Tuesday.
Development of the Saudi petrochemical sector is part of Riyadh’s strategy for diversifying the economy away from heavy dependence on crude export revenues.
Chemical companies usually process refined oil products into petrochemicals, such as ethylene and propylene, that are then used to make plastics and other products.
ExxonMobil started up the world’s first plant that processes crude oil into chemicals in Singapore last year.
Now the world’s largest crude oil exporter plans to build its own at Yanbu, in conjunction with Saudi Basic Industries Corp (SABIC), one of the world’s largest chemicals companies.
“An innovative technology is being studied by the ministry, in collaboration with SABIC, to set up an integrated industrial complex for the production of petrochemicals from crude oil without the need to build a conventional oil refinery,” Naimi told a conference in the Red Sea coastal port of Yanbu.
He said the chemicals project would help provide jobs for Saudi youth in the growing industrial port, home to several petrochemicals plants and oil refineries.
State-run oil giant Saudi Aramco has been researching ways to make ethylene and propylene directly from oil for years.