World's largest petrochemical project uncoveredby Jyotsna Ravishankar on Dec 18, 2012
Ziad Al-Labban talks exclusively to Jyotsna Ravishankar about his leadership of Sadara Chemical Company, the most ambitious downstream project in the Middle East
In every industry, there is occasionally that single project announcement that dwarfs all others previously made. In the petrochemical industry, this would be the $20 billion Sadara project in the Eastern Province of Saudi Arabia. Sadara is the project on everyone’s lips in the Middle East.
It is the biggest and boldest downstream project ever announced from the oil rich region. Sadara in Arabic means ‘To Lead’ and all eyes in the industry are on this project to see if it will, in fact, bring to the region a leadership role as a major producer and exporter of petrochemicals.
In October, 2012, Ziad Al-Labban took over the post of chief executive officer of Sadara. Rich in experience, he had recently proved his capabilities at another of the world’s high-profile downstream projects – Rabigh Refining & Petrochemical Company (Petro Rabigh). Both Sadara and Petro Rabigh sit under the umbrella of the energy giant Saudi Aramco.
RPME spoke exclusively with Al-Labban in Saudi Arabia soon after he took over as the CEO of the company to build and operate the world’s largest chemical complex ever to be built in a single phase.
“As I assume this role, my initial focus is on enhancing shareholder value through teamwork,” asserts Al-Labban.
“My previous job as President & CEO of Petro Rabigh involved the operation of the world’s largest integrated refining and petrochemical facilities ever then having been built in a single phase, so Sadara can be regarded as a logical progression in my career.”
He says the challenges involved in delivering the mammoth Sadara project are human-centric; and success hinges on being able to assemble and direct the right teams to safely and reliably build and operate the facilities.
Sadara is on track to have first products from its manufacturing units in 2015, with the entire complex scheduled to be up and running in 2016. Sadara is expected to generate $10 billion in annual revenue within a few years of operation. Far from being daunted, Al-Labban says the timing and the revenue figure are ‘realistic targets’.
Sadara is a joint venture between Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company (Dow). An initial public offering (IPO) is expected to take place after completing project financing for the project.
In September, the United States Export-Import Bank (Ex-Im Bank) approved a record breaking loan for Sadara. The bank agreed to directly finance $4.9 billion to help build the petrochemical complex.
The loan is the largest in the bank’s history, and approximately 70 companies including Dow, KBR, ABB Inc., together with more than 20 smaller businesses facilitated by the finance, are expected to export US goods and services to the facilities in Jubail Industrial City II in eastern Saudi Arabia, the bank said.
“Ex-Im Bank’s action will allow US manufacturers ... to sell equipment and services to the largest industrial complex ever built in a single phase,” said Andrew Liveris, Dow chairman and chief executive officer, on the back of the loan announcement. Reports suggest government export credit agencies in other major countries have also been queuing up to finance construction of the complex.
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