Saudi Arabia’s largest petrochemicals group eyes green, and blue, future

The global transition toward clean energy has transformed the way SABIC, Saudi Arabia’s largest petrochemicals group owned by Aramco, operates and fosters collaboration.

Li Lei, vice president and regional head of North Asia at SABIC, poses at an office of the Saudi company. [SABIC]

The global transition toward clean energy has transformed the way SABIC, Saudi Arabia’s largest petrochemicals group owned by Aramco, operates and fosters collaboration.

With its own commitment to decarbonizing its operations by 2025, the chemical manufacturing company is keen on developing lower carbon emission technologies such as carbon capture and blue and green hydrogen, says Li Lei, vice president and regional head of North Asia at SABIC in a recent interview with the Korea JoongAng Daily.

The business shift led to major partnerships with Korean companies including Lotte Fine Chemical.

The Saudi chemical giant is on the lookout for investment and cooperation in broader areas beyond the energy sector such as semiconductors and automotive sectors, according to the vice president.

The following are edited excerpts from the interview.

Q. The world is rapidly moving toward chemicals and energy sources with less carbon emissions. Can you explain SABIC’s strategy to respond to the transition? A. In 2021, SABIC unveiled its Carbon Neutrality Roadmap, which set out a strategy to decarbonize our operations by 2050 in line with the goals of the Paris Agreement. The roadmap identifies five pathways to decarbonization: Reliability, Energy Efficiency and Improvements; Renewable Energy; Electrification; Carbon Capture; and Green/Blue Hydrogen.

For a petrochemical company, this is an important statement of intent, and we have already made tangible progress. We’re well on track to meet our interim, 2030 emission-reduction target of 20 percent (relative to 2018).

As an example of our electrification initiatives, we are partnering with BASF and Linde to build an electrically-heated steam cracker which has the potential to reduce ethylene CO2 emissions by approximately 90 percent by using electricity from renewable resources instead of burning fossil fuel.

Our mega carbon capture and utilization (CCU) plant in Jubail, Saudi Arabia, which opened in 2015, is one of the largest facilities of its kind in the world, capable of capturing and purifying up to 500,000 metric tons of CO2 from the production of ethylene glycol every year.

With regard to the transition toward clean energy, how does SABIC collaborate with corporations in Asia — especially in Korea?

In December 2022, Lotte Fine Chemicals received the world’s first commercial shipment of 25 thousand metric tones of independently certified clean (blue) ammonia from SABIC Agri-Nutrients and Saudi Aramco. This shipment represented a new milestone in the development of carbon neutrality solutions, with clean (blue) ammonia viewed as a low-carbon alternative to conventional grey ammonia.

We are constantly looking for ways to deliver value to our partners and customers by offering low-carbon solutions. Current global industry challenges relating to climate change and greenhouse gas emissions require us to continually accelerate the pace of innovation to further strengthen our sustainability commitment.

What are some of the main business activities in Korea and how has SABIC increased its presence in the market?

SABIC has been present in Korea for more than 35 years, demonstrating our commitment to the market. During this time, we have invested and expanded our footprint by capitalizing on emerging opportunities and strengthening collaborations with local partners.

Today, we have one office in Seoul, a technology center in Seongnam, and one compounding plant in Chungju. We employ over 150 employees in Korea, who provide tailored solutions for the electrical and electronics, semiconductor, petrochemical and the automotive industry.

In Korea, our testing and development teams work closely with electronics and consumer product manufacturers to design and test new products and components — providing our customers and stakeholders with bespoke solutions. Our teams also work closely with original equipment manufacturer partners in Korea to understand key trends impacting their sectors and identify opportunities to be part of the product design and testing process.

Through SABIC SK Nexlene Company (SSNC) — a joint venture between SABIC and our strategic partner SK Geo Centric — we operate one plant in Ulsan and one R&D center in Daejeon to meet the increasing market demand of the materials produced by the joint venture, where target applications include encapsulant film for use in photovoltaics, enabling energy transition, as well as innovations in new mobility, lighter weight and resilient footwear applications, and enhanced packaging solutions to reduce food wastage. In August 2022, SSNC announced that it will expand capacity production at the Ulsan plant to 300,000 tons.

As the chemicals arm of Saudi Aramco, SABIC formed a marketing collaboration with S-Oil in 2021 for the export business of refinery and polymer, which puts us closer to the market and drives more flexibility to deliver added value for customers.

What kind of investment opportunities is SABIC looking for in Korea? Are there any ongoing discussions?

SABIC is always open to opportunities and sees continued potential in Korea’s key industries, which include petrochemicals, mobile, automotive, semiconductor and more. We constantly explore growth opportunities and collaborations across our value chain partners and leading industry players. With Korea’s successful chemical industry transformation, SABIC is looking to actively drive collaborations with and learn from local major industry players in areas such as battery, mobile and sustainability.

Aramco and SABIC is one of the world’s first producer of blue hydrogen and ammonia. Which country or company are major clients for those?

SABIC is always open to engage and partner with leading companies from around the world, as part of our goal to become carbon neutral and produce products such as sustainable ammonia.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]