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Petrochemicals Middle East visits Tasnee in Saudi Arabia's Al Jubail to meet the president of the petrochemical complex, Saleh Al-Nazha.

Saudi National Industrialisation Company (Tasnee) is the first Saudi joint-stock company wholly owned by the private sector, and has rapidly become one of the leading industrial companies in the Kingdom. "We are the second largest petrochemical company in the country, and we are the biggest private petrochemical company in the Kingdom, also we are one of the biggest companies in the region," says Saleh Al-Nazha, president of Tasnee petrochemical complex.

The company receives its feedstock gas from Saudi Aramco, but the Saudi Arabian government is set to increase the price of allocations by 2011, which will act as blow for the competitiveness of the industry, and is a particular concern to private operators.

"If we lost the competitive advantage of feedstock, it would certainly have an impact, but we have to remember that this is a very strategic move for the Kingdom. Creating heavy industries is something the government is really working on," says Al-Nazha. "It was proven to the European Commission that this is not a subsidy, but a discount, because of the local usage of the material. That has really put us ahead of other producers and we hope that nothing will happen to that discount," he explains.

Recently the company achieved a major operational milestone when it started cracking ethylene from its subsidiary, Saudi Ethylene and Polyethylene Company (SEPC). "I think the biggest achievement of the company to date is the completion of SEPC and the start up of the cracker, just under a year ago. We have also acheived performance which is considered to be the best in the world," beams Al-Nazha.

"Starting up a cracker in less than 36 months has never happened here, and we did it in 34 months," he explains. SEPC is a joint venture between Tasnee and LyondellBasell. It produces 1 million t/y of ethylene, 800 000 t/y of polyethylene and 285 000 t/y of propylene.

"We conducted the performance test five months ago and it was perfect. Recently, we started the HDPE and the LDPE plant. They are the largest units of their kind in the world. Of course, that was a major challenge by itself, to operate such big plants with success," he says.

Just like any other project of this size and scope, the company has not been without its own start-up problems. Al-Nazha concedes that there were some teething problems at the HDPE plant, but the company managed to solve the issues onsite relatively quickly. "What's important is the fact the plant is the largest of its kind and has been running 104% of its designed capacity over the last few months," he adds.

"The 400 000 t/y LDPE plant has also faced a small mechanical problem in one of the compressors, but it had nothing to do with the technology, and we could begin exporting the product when the plant was operating at around 90% capacity," the president of the complex explains.

Al-Nazha says he is not concerned by LyondellBasell's US problems, and the call for chapter 11 bankruptcy protection. "All of our relations and business activities are with the European and Asian offices, and that has been the situation since the beginning of our joint venture with Basell, so it is business as usual," he says.

The crunch

The downturn affecting the global petrochemical industry has engulfed Tasnee as well, but Al-Nazha remains upbeat about a turnaround in fortunes. "Of course, Tasnee is one of the international players and we sell our products in foreign markets. Like everybody else, we have been affected by the downturn, and depressed commodity prices, but we think about the business model of the petrochemical industry in Saudi Arabia, and that remains very solid looking ahead," says Al-Nazha.

The president seems to be confident about the performance of not only his company but also the whole downstream business in the region. "The petrochemical business in Middle East was well positioned to cope with a downturn," he says. 

"The industry has always been cyclical by nature, and we were prepared to see downturns as well as the boom times, and prices will go up again," he explains. Cheap feedstock has put the company in a better position compared with competitors around the globe, but to fully capitalise on this head start, Al-Nazha says the company is always looking to improve the efficiency and to reduce unnecessary costs.

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