State-owned company Saudi Aramco, the world’s leading producer of crude oil with 9.4 million barrels per day of production, is also a major producer of natural gas and the world’s 6th largest refiner. Currently, it is rapidly leveraging its feedstock cost advantages and a favourable geographic portfolio to becoming a growing global competitor in chemical production, according to new research from IHS.

Saudi Aramco’s portfolio ranges from oil and gas exploration, development and production, to refining and chemicals. Headquartered in Dhahran, the company employs more than 57,000 employees in 77 countries.

The company produces commodity chemicals and polymers, including olefins and derivatives and aromatics. At present, Saudi Aramco’s chemical business accounts for about 10% of the corporation’s revenues and earnings, and is managed by the company.

According to Sanjay Sharma, Vice President, Middle East and India at IHS Chemical, Saudi Aramco is relatively a new player in the petrochemical industry, having started operation only in 2007, yet it has shown remarkable growth pace. Further, the firm’s business strategy of integrating refineries and petrochemicals, while common in other regions, is a more recent trend in the Middle East, which is leading to more aromatics and derivatives production. This is, thus, translated in the market by Saudi Aramco’s active participation in domestic and international joint ventures (JV), such as the world-scale petrochemicals project called Sadara, which is a US$20 billion jv with Dow Chemical to be coming onstream in 2016; and despite their being new, the company has driven continuous improvements in its domestic and international projects, mainly in China, South Korea, Japan and the US, Sharma explained.

As for Sadara’s Jubail complex, it will produce an array of higher-value performance products—some of which have never been produced in the region, which is significant for the market, Sharma said.

The company’s Petro Rabigh, a jv with Sumitomo of Japan, is an integrated petrochemical complex that started in 2009 and produces olefins and derivatives in Rabigh, Saudi Arabia. Petro Rabigh is undergoing expansion, with the addition of Rabigh II, which is expected to start production in 2016 to 2017. The main products will include ethylene propylene rubber (EPR), thermoplastic polyolefin (TPO), methyl methacrylate (MMA) monomer, polymethyl methacrylate (PMMA), as well as low-density polyethylene/ethylene vinyl acetate (LDPE/EVA), para-xylene/benzene, cumene and phenol/acetone.

Still according to the IHS report, Saudi Aramco has a number of other JVs, both in the region, and elsewhere, including in South Korea, China, Japan, and in the US, where it holds a 50% share in Motiva Enterprises LLC. Motiva has three locations in the US.—two in Louisiana, and one in Texas.

Saudi Aramco’s strategic projects, noted the IHS report, located mainly in the Middle East and Northeast Asia, cover the most demand-thirsty markets in the world. Most of the plants, which are co-owned by Saudi Aramco, are new, so there are almost no facilities that need be revamped.

Saudi Aramco (Aramco Asia) is also exploring the possibility of starting a refinery in Tuban, East Java, Indonesia. The company signed a memorandum of understanding in 2012 with PT Pertamina (Persero). If started, this refinery will produce petroleum and petrochemical products that will enable the company to cover broader Asian markets. Nevertheless, cost reduction and reliability will remain critical elements of any company’s strategic direction .