With all its units on stream, Sadara can produce more than 3 million metric tonnes per year of plastics and speciality chemical products

Saudi Aramco has signed an agreement for the supply of "natural gasoline" feedstock to Sadara Chemical, reducing the joint venture’s need for naphtha for its mixed feed cracker.

The Sadara Chemical Co, a joint venture of Aramco and Dow Chemical uses ethane, dry gas, refinery naphtha and other refinery liquids as feedstock for its 1.5 million mt/year steam cracker, which started up in August 2016.

Aramco will supply natural gasoline for five-years, Sadara Basic Services Company says in a statement to Saudi stock exchange Tuesday. Naphtha consumption will be reduced as a result of the new supply agreement.

"The quantity of naphtha feedstock which Sadara is entitled to nominate and purchase under the 2012 agreement will be reduced by an amount equal to the quantity of natural gasoline that Sadara nominates under the natural gasoline feedstock supply agreement, subject to a conversion factor", the statement adds.

With all its units on stream at the complex in Jubail on the Arabian Gulf coast, Sadara can produce more than 3 million mt/year of plastics and speciality chemical products. This is six years after the initial shareholder agreement was signed by Dow and Aramco for the first mixed feed cracker in the region.

Saudi Arabia produced some 47.5 million barrels of naphtha in 2016, roughly 130,000 bpd, according to its 2016 annual review published last year.

"Naphtha does yield more petrochemical products, but natural gasoline is much more abundant as a byproduct of associated gas production, so would work out much cheaper," a Saudi Arabia-based analyst says.