SHARQ Announces Intent to Restart MEG Line 4 Production in Jubail

Saudi Eastern Petrochemical Company (SHARQ), a leading petrochemical producer in the country, is gearing up to recommence production at its No. 4 monoethylene glycol (MEG) line in Al-Jubail, Saudi Arabia, during the second half of January, said Chemanalyst.

This strategic move comes in the aftermath of scheduled maintenance that temporarily halted operations on the MEG line. The planned repairs, initiated in November, aimed to address low production margins and ensure the continued operational efficiency of the line with an annual MEG production capacity of 700 thousand tons.

Earlier reports indicated that SHARQ, on November 4, initiated the temporary shutdown of production on its No. 3 line, responsible for monoethylene glycol (MEG) production in Jubail, Saudi Arabia. The suspension was part of a planned maintenance regimen for the enterprise, which boasts a production capacity of 500 thousand tons of MEG annually. The proactive maintenance efforts on line No. 3 were slated for completion in the initial half of December, reinforcing SHARQ's commitment to optimal facility upkeep and reliability.

Monoethylene glycol (MEG), coupled with terephthalic acid (TPA), stands as a critical component in the production process of polyethylene terephthalate (PET), a widely used material with diverse applications.

The decision to temporarily halt production at line No. 4, coupled with the earlier maintenance activities on line No. 3, underscores SHARQ's strategic approach to ensuring the long-term reliability and efficiency of its MEG production facilities. The company's commitment to planned maintenance aligns with industry best practices, allowing for the proactive identification and resolution of operational challenges to enhance overall productivity.

As SHARQ prepares to resume production at the No. 4 MEG line in Al-Jubail, the company positions itself to meet the ongoing demand for MEG and contribute to the regional and global petrochemical landscape. The anticipated restart in the second half of January reflects SHARQ's meticulous planning and adherence to timelines, ensuring a seamless transition back into full-scale production.

MEG's pivotal role in the production of polyethylene terephthalate (PET) underscores the significance of SHARQ's operations in the petrochemical value chain. The company's endeavors not only cater to market demands but also play a vital role in sustaining downstream industries reliant on PET for various applications.

In conclusion, SHARQ's planned resumption of production at its No. 4 MEG line in Al-Jubail signifies a strategic milestone in maintaining operational excellence. The concerted efforts in scheduled maintenance activities on both line No. 4 and line No. 3 underscore SHARQ's commitment to industry-leading standards, ensuring the reliability and efficiency of its MEG production facilities. As SHARQ navigates the complexities of the petrochemical landscape, the impending restart positions the company for continued success in meeting the evolving demands of the market and contributing to the broader petrochemical value chain.

We remind, Saudi Eastern Petrochemical Company (SHARQ), a prominent petrochemical producer in Saudi Arabia, has implemented a reduction in the utilization of linear polyethylene (LDL) production at its Al-Jubail facility. This decision stems from a shortage of raw materials, resulting in a substantial decrease of approximately 50% in the overall LDL production. The extended closure of the cracker has been a key factor contributing to the shortage of raw materials, significantly impacting three LDL plants operated by SHARQ.

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The Kotovsky Plant of Nonwovens, situated in the Tambov Region, is gearing up for an ambitious expansion plan to double its polyester production, said Chemanalyst.

This strategic initiative involves a substantial investment of nearly 141 million rubles, with 91 million rubles secured through a preferential loan from VEB.RF. The loan, granted at a minimal interest rate of 1% per annum, is earmarked for the acquisition and deployment of essential equipment that will facilitate the augmentation of polyester production. Once implemented, this project aims to elevate the annual production of polyester from 26 million to an impressive 50 million linear meters.

The driving force behind this expansion is a targeted effort to address the shortage of polyester in the domestic market. The imposition of sanctions by unfriendly nations has resulted in a decline in the supply of goods containing polyester, including clothing, bed linen, furniture, and soft toys. Consequently, there has been a surge in demand for such products among domestic manufacturers. The Kotovsky Plant of Nonwovens, recognizing this growing need, seeks to bridge the gap by significantly enhancing its production capacity. The timely execution of this project is poised to play a pivotal role in meeting the escalating demand for polyester-based products within the country.

A key aspect of the project is its broader impact on import substitution, particularly in light of the current geopolitical landscape. The report emphasizes that the increase in polyester production aligns with the imperative of reducing dependence on external sources, thereby contributing to import substitution—a crucial goal for the Russian economy. The Kotovsky Plant of Nonwovens, under the guidance of entrepreneur Andrey Letuchev, recognizes the strategic importance of such initiatives in fostering economic growth and sustainability.

Maxim Egorov, the regional head, underscores the significance of new investment projects as drivers of regional economic growth. Importantly, he highlights the role of effective support measures, coupled with the initiative and responsibility of entrepreneurs and investors, in making such expansions possible. This collaborative effort reflects a commitment to bolstering the regional economy and supporting the overall development of the Russian economy.

This expansion plan aligns with a broader trend in the region, as evidenced by the Neotex nonwovens plant in the Tula region. With a substantial loan from the Industrial Development Fund amounting to 704.7 million rubles, Neotex aims to establish a complex for the production of polypropylene nonwovens, projecting a capacity of 12.2 thousand tons annually. This concurrent initiative emphasizes the industry's commitment to diversification and the development of various nonwoven materials.

As of the end of 2022, the Kotovsky Plant of Nonwovens reported robust financial performance, with revenue totalling 4.4 billion rubles and a net profit of 160.4 million rubles. These figures underscore the company's financial stability and position it as a key player in the Russian nonwovens manufacturing landscape.

We remind, Indorama Ventures Public Company Limited (IVL), one of the world's leading sustainable chemical companies, and technology specialist Polymateria Limited have signed an exclusive 10-year partnership to help household brands bring biodegradable nonwoven hygiene products to the market through biotransformation technology.

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The storm preemption system in Novorossiysk may be changed to minimize downtime for oil transshipment, said Interfax.

"The storm factor complicates operations very seriously. We requested statistics on storms over the last 15 years. Whereas before 2017 there were 60-75 storm days on average, last year there were 111, and this year there are 118. That is, the port is forced to work intermittently. But there is not only oil there, but also other cargoes," Transneft President Nikolay Tokarev said in an interview with the corporate journal Pipeline Oil Transportation.

"In addition, there are organizational aspects, and we are trying to find optimal solutions that would allow us not to wait for the weather. Because sometimes a warning is issued many hours before the onset of a storm situation, after which work is stopped and ships put out into the harbor while waiting for normal weather. In our opinion, it is not always justified, and I hope that we will come to an understanding on this issue," he added.

In addition, according to him, there is a lack of marine pilots. "We have our own pilot service, but it needs to be strengthened to moor several vessels at once. So there are many nuances of the production plan, which depend not only on the weather," the Transneft chief said.

We remind, Supplies of Russian gas to China via the Power of Siberia pipeline have once again reached another all-time high, Russia's Gazprom said on Saturday. Gazprom set a new historic record of daily gas supplies to China on Friday, December 12, the Russian company said. Supplies of Russian gas via the Power of Siberia gas pipeline once again exceeded the daily contractual requirements.

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There has been a decline in the production of motor gasoline owing to unscheduled repairs on one of the catalytic cracking units at the Lukoil-Nizhegorodnefteorgsintez refinery in Nizhny Novgorod, Russia's Energy Ministry said in a statement, as per Interfax.

The Energy Ministry and oil companies at the operational headquarters have developed measures to continue the uninterrupted supply of fuel to the domestic market while Lukoil-Nizhegorodnefteorgsintez undergoes repairs.

"The participants at the operational headquarters have emphasized that the needs of the domestic market would be met by reducing export supplies and redirecting the existing resources of other market participants," the Energy Ministry said.

"The production of motor gasoline at Russian enterprises fully meets all the needs of the domestic market. Inventories total nearly two million tonnes, which is more than enough to meet demand," the Energy Ministry said.

The company has already developed a plan to eliminate the problems as soon as possible.

We remind, Romania's Petrotel Lukoil refinery, owned by Russia's Lukoil, will shut for one month from Wednesday for planned maintenance works, online news website Profit.ro reported. Lukoil's Romanian unit has a relatively small market share compared to bigger refineries in the country. The refinery uses alternative fuel supplies and is not affected by a ban on Russian imports.

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The production of Kia components will be localized in the Kostanay region, said Kumar Aksakalov, the governor of the region, said Chemanalyst.

The cost of the localization project is estimated at 13 billion tenge or $28.7 million at the current rate, Aksakalov said at a meeting with President Kassym-Jomart Tokayev on Thursday.

The governor also informed the president that SaryarkaAvtoProm LLP had launched a 23 billion tenge project for the assembly of 30,000 Chevrolet Onix cars per year.

In August 2023, the Kazakh government formed a partnership with South Korea, launching Kia Qazaqstan. This joint venture will oversee the construction of a new Kia manufacturing facility in Kostanai. This initiative represents the beginning of Kazakhstan's first automotive localization center and a step forward in training specialized technical personnel.

Construction of the Kia manufacturing facility in the Kostanai region started in November 2023. Investment in the project totals 90 billion tenge. The new plant aims to create 1,500 highly paid jobs and will have the capacity to produce 70,000 cars annually.

The construction is expected to be completed by 2024, followed by the installation of equipment. The pilot launch of the plant is slated for the first quarter of 2025, with full production commencing in the second quarter. The construction of the auto component plant is the next stage of the project.

The completely knocked down assembly (CKD) of Kia's Sportage cars was launched at Allur's automobile plant in the Kostanai region in January 2023.

Allur is a shareholder of SaryarkaAvtoProm LLP, Kazakhstan's largest auto manufacturer, as well as an official distributor, manufacturer, and official dealer of JAC, Ankai, Yutong, Chevrolet, manufacturer of Niva Chevrolet, UAZ, MAN.

We remind, The storm preemption system in Novorossiysk may be changed to minimize downtime for oil transshipment. "The storm factor complicates operations very seriously. We requested statistics on storms over the last 15 years. Whereas before 2017 there were 60-75 storm days on average, last year there were 111, and this year there are 118. That is, the port is forced to work intermittently. But there is not only oil there, but also other cargoes," Transneft President Nikolay Tokarev said in an interview with the corporate journal Pipeline Oil Transportation.

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