Saudi Arabia tightens Jubail security after attacks

Saudi Arabia is tightening security at the east coast petrochemical hub of Jubail after drone strikes targeting the country's oil infrastructure at the weekend.

Saudi Arabia was forced to shut in 5.7mn b/d of crude output after drone attacks caused fires at two of the country's crude processing facilities. The attacks at the Abqaiq plant, the largest crude processing facility in the world, and the Khurais plant halved Saudi Arabia's production.

Iran-backed Houthi rebels, who are currently at war against Saudi-led forces in Yemen, said they targeted the two plants. But the US directly blamed Iran for the drone attacks.

Abqaiq, in Saudi Arabia's Eastern Province, is only 180km from Jubail where a number of petrochemical plants are located.

Security has been tightened in the past 48 hours at all Jubail land checkpoints leading to the plant sites. Saudi Arabia is to increase surveillance of drones entering its airspace, with a "shoot on sight" policy. Saudi Arabia is mindful of avoiding another incident just two months before the country hosts world leaders for the G20 Summit in Riyadh.

Petrochemical producers with facilities in Jubail include state-owned Sabic and its various affiliates, fellow Saudi firms Tasnee, Sipchem and Advanced Petrochemical, as well as the Saudi Chevron and Sadara joint ventures. The Jubail-based suppliers also produce methanol, aromatics and isocyanates, along with polymers.

Sabic and fellow Saudi producers said yesterday petrochemical feedstock will be curbed for their subsidiaries in the aftermath of the drone attacks.

The feedstock shortage is expected to support petrochemical prices such as polyethylene and polypropylene in the short term. Petrochemical prices are sensitive to movements in upstream crude values. Crude futures surged by almost 20pc in Asian trading today after US President Donald Trump threatened to retaliate in the wake of the attacks.

Jubail has several petrochemical expansions planned in the coming years.

Global petrochemical giant Ineos in June invested $2b for new projects in Jubail. The projects, due to come on line in 2025, include a 425,000 t/yr acrylonitrile plant, a 400,000 t/yr linear alpha olefins plant and associated poly alpha olefins unit.

Other key petrochemical sites in Saudi Arabia include Rabigh and Yanbu on the west coast, where security is also expected to be tightened.

PetroRabigh, a joint venture between Aramco and Japanese trading house Sumitomo, is the main petrochemical producer based in Rabigh. PetroRabigh produces a variety of petrochemical products including olefins, polymers and aromatics.

Saudi petrochemical companies Natpet, Yansab and Yanpet are based in Yanbu.