Saudi Basic Industries Corp (Sabic) said on Tuesday it would build only one rubber plant project, in Jubail on Saudi Arabia's Gulf coast, instead of two as originally planned.

When Sabic and Exxon Mobil Chemical first announced the rubber project, they said the expansion would include the Kemya joint venture between the two companies and their other venture, Yanpet, which is based in Yanbu on the Red Sea coast.

But Sabic said in a bourse statement it would go ahead with only one of those ventures, since the Jubail  Industrial city location provides better synergies with the Kemya petrochemical facility.

The duo said they had selected Jubail as the site for the manufacturing units following a comprehensive evaluation of a number of variables, including integration opportunities with their existing petrochemical joint venture at Kemya, to determine the best location for producing these specialty products.

The capacity of the project is little changed at more than 400,000 tonnes per year of carbon black, rubber and synthetic polymers for domestic and international sales.   

Sabic and affiliates of ExxonMobil Chemical said the work on the proposed elastomers project JV had moved fully into Front-End Engineering and Design (FEED) stage.

The project includes a vocational training institute and product application development and support center, which is aligned with Saudi Arabia’s National Industrial Clusters Development Program to grow and diversify its manufacturing sector, they said.

According to them, the project had reached the optimal industrial layout with the move to Jubail. "During Feed both partners, Sabic and ExxonMobil, are targeting development of a globally competitive project with best-in-class industry cost."

Sabic said work on the detailed engineering designs had reached an advanced stage. It did not say what the cost of the project would be, although an executive from Exxon Mobil Chemical had said it would cost $5 billion.-Reuters and TradeArabia News Service