Sipchem secured Saudi gas feedstock for a new methanol plant that will lift total capacity 45%. The project supports Vision 2030 industrial goals.
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Sahara International Petrochemical Company, known as Sipchem, secured a feedstock allocation from Saudi Arabia's Ministry of Energy for a new methanol plant. The wholly owned project will increase the company's overall production capacity by 45% once completed, Sipchem said in a statement.
The new plant builds on Sipchem's existing methanol operations. The company has run methanol units for years and has a track record of project execution, it said. The expansion ties into the Kingdom's Vision 2030 industrial diversification push, which aims to reduce reliance on crude oil exports by building out downstream petrochemical capacity.
Sipchem did not disclose the feedstock type, volume, or expected completion date. The company said it would announce material developments as they occur under Saudi capital market rules.
Methanol is a basic petrochemical used to make formaldehyde, acetic acid, and olefins. It is also a feedstock for gasoline blending and, increasingly, for marine fuel as shipping lines test methanol-burning engines. Saudi Arabia has abundant natural gas, the primary feedstock for methanol production in the region, and has been allocating gas to petrochemical projects as part of its industrial strategy.
The 45% capacity jump is large for a single-plant addition. Sipchem's current nameplate capacity across its existing complexes is roughly 4.5 million metric tons per year of various petrochemicals, according to company filings. A 45% increase implies the new methanol unit alone could add around 2 million tons of annual capacity, though Sipchem did not confirm that figure.
The company thanked the Ministry of Energy for its support, noting the allocation helps enable national industrial initiatives. The ministry has been parceling out gas feedstock to petrochemical projects on a case-by-case basis, prioritizing plants that use advanced energy-efficient technology. Sipchem said the new methanol unit will adopt the latest energy-saving processes, which should support its long-term cost competitiveness.
Sipchem shares trade on the Saudi Stock Exchange under ticker 2310. The stock has risen about 12% year to date, broadly in line with the petrochemical sector index. The company reports earnings next month.
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