Saudi Basic Industries Corp (Sabic) said it was in the last stages of preliminary studies for the construction of the world’s first oil-to-chemicals (OTC) complex in Saudi, whose operations was likely to start by the end of 2020.

One of the world's largest petrochemical groups, Sabic said it expects to use around 10 million tonnes of crude oil annually as feedstock for the plant, which is equivalent to 200,000 barrels per day, or an average-sized oil refinery.

The development of the Saudi petrochemical sector is part of Riyadh's strategy for diversifying the economy away from heavy dependence on crude export revenues.

In its first public announcement on the project, Prince Saud bin Abdullah bin Thenayan Al-Saud, the chairman of Sabic and the Royal Commission for Jubail and Yanbu, said: "Saudi Arabia is on a journey to grow, diversify itself, reduce its energy intensity and move towards a knowledge economy. To this end, it requires the commitment and effective execution of all its engines."

"Today we will demonstrate how Sabic is well on the way to transforming itself into a solutions provider to its destination markets and delivering value to its customers via technology. All of this means innovation, which is commercialized invention," he added.
 
Prince Saud was speaking at the inauguration of the 'Sabic Innovation Day.' He said the was a showcase of Sabic’s technological achievements around the world.

In his keynote address, Mohamed Al-Mady, Sabic vice chairman and CEO, said: "Sabic is today seeing the rewards of innovation leadership and driving the technology agenda in key areas of our business. The OTC complex will set a new competitive standard and establish Saudi as a technology leader in the petrochemical industry."

State-run oil giant Saudi Aramco has been researching ways to make ethylene and propylene directly from oil for years to grow its petrochemicals business.

"OTC technology allows for the conversion of crude oil to petrochemical products at the highest ever achieved conversion rate in a competitive and sustainable way," stated Al Mady.

The OTC complex will comprise an innovative configuration of unit operations that, in combination, will generate the world's highest yield conversion of oil to chemicals.

Sabic, he said, expects to utilize around 10 million metric tons of crude oil at the complex to produce petrochemicals, and eventually advanced specialty chemicals in line with its 2025 strategy.

Sabic did not say where the complex would be located, how much it would pay for the oil or if the crude would be subsidised. It did not specify which type of the crude it would use either.

In a statement to the stock exchange, Sabic said the new OTC complex will help provide around 100,000 direct and indirect jobs for Saudis.

To help spur innovation globally, Al-Mady announced an annual Innovation Award to entrepreneurs.

Sabic will be offering cash awards of up to SR10 million ($2.6 million) along with research and commercial support for innovative ideas or existing inventions in the field of smart polymers. Applications will be accepted electronically through the Sabic website from June 1, 2014.

“Every year Sabic screens more than 250 start-ups for possible partnership,” remarked Al-Mady. “We hope the Sabic Innovation Award will encourage many more worthy projects,” he added.

“Sabic’s innovation engine is firing on all cylinders,” the company chief told the attendees.

“Innovation is key to the future not only of Sabic but more broadly for our country. Innovation can make Saudi a knowledge economy and a more energy efficient environment. But it takes the continued efforts of government, academia and business to generate an ecosystem for growth. We are and will continue to be part of those efforts,” he added.

Also speaking on the occasion, Ernesto Occhiello, executive VP, Technology and Innovation, said Sabic recently filed for its 10,000th patent, a landmark number that establishes the company as the largest patent developer in the Middle East.

On average, Sabic files a new patent every 18 hours, each based on the work of approximately four researchers. This represents greater efficiency than any other top ten companies in the chemical industry, he said.

“Intellectual property is an important tool to help Sabic achieve its 2025 strategy,” he said.

“Our patent estate is one of several indicators we use to measure our return on investment in research and development. Our 10,400 global patent dockets are a reflection of our emphasis on innovation to support our growth,” he added.-Reuters and TradeArabia News Service