SHARQ in Jubail Trims Utilization of LDL Production

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.

In addition to LDL production, SHARQ also manages a low-density polyethylene LDPE production line with an annual capacity of 400,400 tonnes. While this LDPE production line is also affected by the lower availability of raw materials, market sources suggest that the impact is comparatively less pronounced than in the LDL production sector. The repercussions of the reduced LDL production extend to delayed deliveries to the market, posing challenges for the timely supply of these critical petrochemical products.

A notable incident leading to this development was the unexpected halt of one LDL production line with a capacity of 5,000 tons per year in January 2023. The interruption was attributed to a technical breakdown, further exacerbating the challenges faced by SHARQ in maintaining optimal production levels. The company's efforts to address and resolve technical issues will play a crucial role in mitigating the impact on LDL production and ensuring the reliability of supply chains.

SHARQ, a joint venture between SABIC and Saudi Petrochemical Development Co (SPDC), represents a collaborative effort between Saudi and Japanese entities. The consortium of Japanese companies, led by Mitsubishi, forms the SPDC, reflecting the international partnerships that play a vital role in the operation and development of SHARQ's petrochemical facilities.

The reduction in LDL production at SHARQ's Al-Jubail facility underscores the complex challenges faced by the petrochemical industry, where disruptions in the supply chain and technical breakdowns can have cascading effects. The shortage of raw materials, particularly attributed to the prolonged closure of the cracker, highlights the vulnerability of petrochemical production to external factors.

As SHARQ grapples with these challenges, industry observers will closely monitor the company's efforts to address technical issues, restore production levels, and navigate the complexities of the petrochemical market. The delays in market deliveries resulting from the reduction in LDL production further emphasize the importance of maintaining a resilient and agile supply chain in the face of unexpected disruptions.

SHARQ's decision to reduce LDL production in Al-Jubail due to a shortage of raw materials highlights the intricate nature of the petrochemical industry. The collaboration between Saudi and Japanese entities in the form of SABIC and SPDC adds an international dimension to the challenges faced by SHARQ. The industry will keenly watch how the company addresses technical issues, restores production, and adapts its supply chain strategies to ensure the consistent delivery of petrochemical products to the market.