Feedstock for Saudi petrochemical companies is expected to be back to normal levels by the end of September according to two of the Kingdom’s biggest downstream users. This is earlier than expected after the attacks on the Aramco facility a few weeks ago.
Feedstock for Saudi petrochemical companies is expected to be back to normal levels by the end of September according to two of the Kingdom’s biggest downstream users. This is earlier than expected after the attacks on the Aramco facility a few weeks ago.
The attacks on the world’s biggest oil processing facility as well as a field in the country’s oil-rich Eastern Province wiped out 5.7 million barrels per day, or the equivalent of 5 per cent of global supply in mid-September.
Saudi Arabia is the world’s largest oil exporter and says it has continued to meet its contractual obligations to international customers by drawing on its stocks and cutting back on feedstock supply to domestic refiners and petrochemical players. Saudi Basic Industries Corporation (SABIC) is the largest listed company in the kingdom said it suffered a 40 per cent decrease in available feedstock in the immediate aftermath of the attacks.
On Sunday, the company said in a statement to the Tadawul stock market that the loss of supply had been trimmed to 20 per cent, with “the expectation to reach normal levels by end of September”. SABIC said it was working to evaluate the financial impact of the attack and would disclose “any material developments in this regard”.
Other companies had also reported supply disruptions ranging from 30 to 50 per cent of feedstock in the aftermath of the attack. The National Petrochemical Company said in a disclosure to the Saudi bourse on Sunday that its supply of feedstock had “gradually improved” to reach normal levels on Thursday. The company had initially suffered a 40 per cent decrease in feedstock supply from Saudi Aramco, but added there had been no “material financial impact” from the disruption.
London-based consultancy Facts Global Energy said a note last week that the restriction of supply to local petchem players is likely to hit consumption of products such as liquefied petroleum gas and naphtha. Saudi Arabia is a significant exporter of LPG, selling 290,000 bpd on average in the first eight months of the year, and 220,000 bpd of naphtha during the same period. The kingdom’s petrochemical sector is the main consumer of its local supply of both products. “We expect both exports and domestic consumption will be impacted for both products, mainly in September and to a lesser extent in October,” the consultancy said.
Source: Reuters SABIC
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