Report: 80% of Yanbu’s exports include liquid fuels and petrochemicals

The petrochemical industry in Madinah is one of the main strategic sectors in the Kingdom, due to the region’s proximity to oil and gas supplies via the East-West pipelines and its easy connection to them. Yanbu Industrial City is specialized in petrochemicals and is home to King Fahd Industrial Port, the largest oil shipping complex on the Red Sea. In addition, more than 80% of Madinah’s products are exported, most of which are liquid fuels or petrochemicals. According to the “Invest in Madinah Region” report issued by the Ministry of Investment, Yanbu includes some of the largest oil refining and petrochemical facilities in the Kingdom, as it can process 1.2 million barrels of oil per day and produce 2.25 million tons of ethylene annually. Expanding the Kingdom’s refining capacity is part of a strategy to develop the capabilities of manufacturing industries with the aim of reaching higher stages of the petrochemical value chain. Diversification into specialty chemicals is expected to increase revenues per ton from $500 to $2,000 by 2040 in the Kingdom. The development of the petrochemical sector in Madinah is also supported by the Royal Commission for Jubail and Yanbu, which manages Yanbu Industrial City and promotes investment opportunities in the city. The Commission offers incentives in world-class infrastructure, abundant raw materials, a competitive rental rate of $1.2 per square meter per year for industrial land, and a one-year rental exemption for the design phase with long-term contracts of up to 30 years. The petrochemical sector is considered one of the most mature sectors in Madinah, as the region is characterized by an advanced system that includes industrial infrastructure and access to raw materials in addition to the large export capacity through ports in the Red Sea. The region also provides an ideal area for cooperation in the oil sector and expansion in manufacturing solutions such as specialty chemicals due to the availability of industrial infrastructure and advanced transportation areas, as Yanbu Industrial City includes a large percentage of petrochemical companies, and there is also the industrial city in Madinah, which includes more than 240 companies in a wide range of sectors such as rubber, plastics and food products. The report indicated that by analyzing the latest business opportunities in this sector, it can be concluded that the basic chemicals stage in the value chain provides a higher degree of opportunities in the region, but there is an increasing focus on products in the middle and post-production, and the basic chemicals sector benefits from the region’s proximity to oil and gas sources for use as raw materials and to enhance competitive production due to the advanced industrial, transportation and energy infrastructure. There are also opportunities in the field of specialty and transformational chemicals, such as plastics industries with many companies operating in this field.