Chemicals

Increased feedstock costs, coupled with depressed product prices, squeezed profit margins in 2023. The mono-ethylene glycol (MEG) market is oversupplied due to massive expansions over the last four years, leading to low operation rates and low cash margins. Additionally, the coal-based MEG market is experiencing a faster recovery supported by low coal prices and developing technology; however, this market is under huge pressure to meet sustainability targets. On a more positive note, competitive feedstock prices for methanol supported improved margins.

Overall market conditions required heightened attention to optimizing feedstock supply and production-planning processes to minimize its impact. Chemicals’ approach across 2023 has been to deploy higher volumes to regions and markets with better value realization; leverage spot sales as an avenue for opportunistic value creation; and grow the customer base by targeting medium-sized customers with high potential for growth.

SABIC’s integration with Saudi Aramco continued to progress at a good pace with synergies in multiple areas including the development of joint growth projects for both companies inside Saudi Arabia as well as globally. This integration will enable SABIC to drive profitable growth and mitigate any associated risks.

SELECTED 2023 DEVELOPMENTS

GROWTH PROJECTS

• New MTBE plant at Petrokemya, Jubail, Saudi Arabia: The plant―the single largest MTBE production plant in the world―will replace the existing Petrokemya North isobutene dehydrogenation unit with a new SABIC-licensed unit. It is the first MTBE project to be licensed by SABIC. The plant will meet the sustainability requirements of the Saudi Energy Efficiency Center (SEEC) and will help in eliminating existing chronic issues including safety, operability, and reliability, besides increasing the plant’s nameplate capacity to 1,000kt per annum.

CIRCULAR ECONOMY

• Bio-MTBE: We successfully produced and completed a deal of Bio-MTBE by substituting conventional methanol feedstock with bio-based methanol, delivering on the needs for bio-fuels for the European gasoline market.
• United CO₂ capture: In line with our carbon neutrality and circular economy goals, a synergy between United and Ar-Razi plants, Saudi Arabia, was established whereby the CO₂ stream from the United glycols plant is to be injected as an additional feedstock stream to Ar-Razi’s methanol plants. This initiative will improve the overall energy consumption and reduce SABIC’s carbon footprint.
• First Americas site to receive ISCC PLUS certification: The US Styrene Monomer business unit at SABIC’s Cos-Mar site (Louisiana, US) became the first site in the Americas to receive the ISCC PLUS certification, which will enable production and sale of circular/bio-renewable styrene to downstream derivative producers.

Read more about the performance of our Chemicals business in 2023.

_{Disclaimer: This abridged interactive version of the SABIC Integrated Annual Report 2023 is based on the original PDF report published on this website. In case of any discrepancy, the original PDF report will prevail.}