Saudi Kayan Petrochemical Company, a subsidiary of Saudi Basic Industries Corporation (SABIC), announced a significant strategic milestone: the receipt of an allocation document for additional quantities of ethane gas from the Ministry of Energy. This allocation will increase the company's ethane feedstock by 30 million standard cubic feet per day (MMscfd), bringing the total allocation to 80 MMscfd, in addition to its existing butane allocation of 70,000 barrels per day (bpd).
Historical background and strategic context
Saudi Kayan Petrochemical Company was established in Jubail Industrial City, the heart of the petrochemical industry in the Kingdom and the Middle East. This increase in feedstock supply comes within the framework of national efforts to maximize the added value of the Kingdom's natural resources, a key pillar of Saudi Vision 2030. The Ministry of Energy is continuously working to allocate feedstock to downstream industries to support industrial growth, diversify income sources, and enhance the Kingdom's position as a major player in the global energy and petrochemical market. Ethane is the primary raw material for the production of ethylene, which is used in the manufacture of a wide range of plastic products and other chemicals.
Economic impact and future prospects
This increase is expected to have a tangible positive impact on the financial and operational performance of Saudi Kayan. The increased availability of feedstock will allow the company to raise its production capacity, improve operational efficiency, and enhance its competitiveness in local and global markets. In its statement to the Saudi Stock Exchange (Tadawul), the company explained that the financial impact of this increase will begin to appear in its financial statements upon completion of the allocation, which is expected to positively affect its results during the second half of 2026, or when the quantities become available, whichever comes first.
To maximize the benefits of these additional quantities, the company plans to implement several projects related to meeting the Ministry of Energy's requirements, at an estimated cost of approximately $162 million. This move will not only impact the company but will also strengthen the petrochemical value chain in the Kingdom, supporting downstream industries that rely on its products, thus contributing to job creation and driving sustainable economic development.
