Plastics production at a large export complex in Jubail, Saudi Arabia, will return to normal "within days" after power cuts from the national utility interrupted operations more than a week ago, Saudi Arabia Basic Industries Corporation (Sabic) said yesterday. Sabic is the fourth largest producer of basic plastics in the world, but has been running its polyethylene and polypropylene plants at reduced rates since the blackout.
Jubail is one of Sabic's two major production centres in the Kingdom, and the company plans to ramp up capacity significantly at the site on the Gulf coast this year. Production of fertilisers, steel and other polymers and petrochemicals in Jubail were not affected by the power outage. The disruption of power supplies to one of the country's most important production centres raises new questions about whether Saudi Arabia will be able to provide the energy infrastructure needed to support its ambitious industrialisation plans.
The Saudi Electricity Company (SEC), the country's utility, said it suffered a loss of 3,400 megawatts from the power grid on July 23, cutting power to cities in the eastern region including Dammam, Jubail and Ahsa, as well as parts of Riyadh. The SEC said the disruption in the hot afternoon occurred because of transmission problems and the malfunctioning of several power plants. The country has undergone power cuts periodically in the past several summers, however, as generation capacity has struggled to meet surging demand, and analysts have predicted that the SEC would need to resort to cuts to avoid damage to the overburdened electricity grid this summer.
A demand forecast assembled in March by Ibrahim el Amin, a professor at the King Fahd University of Petroleum and Minerals in Dharan, found that peak generating capacity in the kingdom would have to rise to a staggering 130 gigawatts by 2032, from about 40 gigawatts today. Mr Amin's forecast said the government's plan to construct several new "industrial cities" would make up seven gigawatts of that new demand.
The country has fallen so far behind in the race to build new capacity that it now burns crude oil to generate 16 per cent of its energy supply and plans to continue the expensive practice for the foreseeable future, according to estimates provided by Abdulla al Shehri, an official at the Electricity and Co-generation Authority, at a conference in Abu Dhabi in March. The disruption to the Jubail facility comes just as Sabic is putting the finishing touches on new polymer capacity in the city.
After this year, the company and its affiliates plan to have increased production of ethylene by one million tonnes, and of polypropylenes by 450,000 tonnes. Next year, the company's partner, Saudi Kayan, plans to begin operating a giant cracker unit that will have a capacity of two million tonnes per year to make all types of basic plastics. @Email:cstanton@thenational.ae
