Saudi Petrochemicals - NCBC

COMPANY DESCRIPTIONExhibit 31: Product flow chartMetric tons per annum (mtpa), unless otherwise statedOxygen(525,000 mtpa)Ethane(80 mn cu ft per day)Ethylene(1.3 mn mtpa)Ethylene oxide / ethyleneglycol770,000 mtpaHDPE400,000 mtpaPropane(45,000 bbl per day)Olefin productionunitLLDPE500,000 mtpaBenthin –32,000mtpaExchange of refinedpropane (50,000 mtpa)Propylene(0.4 mn mtpa)Polypropylene400,000 mtpaButene 2MTBE50,000mtpa100,000mtpaButene separation unit(26,000 mtpa)Butene 126,000 mtpaThermal gasoline(120,000 mtpa)Benzene extraction unit,Toluene, XyleneBenzeneToluene, Xylene100,000 mtpa38,000 mtpaSource: Yansab, NCBC Research estimatesFeedstock agreementETHANE AND PROPANEYansab has secured low cost ethane and propane allocations from Saudi Aramco tofeed its mixed-feed facility.Saudi Aramco has allocated 80mn cubic feet per day of ethane, 35,000 barrels ofpropane per day and 35mn m 2 per day of natural gas to Yansab. This allocation issufficient to produce 1.25mn mt of ethylene and 0.325mn mt of propylene annuallyimplying the plant would operate at an average utilization rate of 93%. We believeit may be difficult for the company to secure this additional allocation due togrowing domestic demand and limited supply.Saudi Aramco supplies ethane to Yansab at a fixed price of USD0.75/mmBtu. Webelieve there will be a general increase in this pricing for the industry in 2012 toUSD1.5/mmbtu. However, for Yansab, given contractual agreements, we believethe upward revision in ethane prices will likely take affect after 2015. Based on this,we have incorporated this revision in our model from 2016. The propane price islinked to Japanese naphtha prices and is likely to be revised upward in 2011,though the hike is expected to be limited. Despite the prices for these key inputsrising, we note that Yansab will still be receiving ethane and propane at attractivelevels compared to global peers.27 April 2010 YANSAB – INITIATING COVERAGE 45