Non-metallic & Chemicals Investment...
Transcript of Non-metallic & Chemicals Investment...
Saudi Aramco: Public
The next slides contain forward-looking statements regarding future events based on current
expectations, estimates, forecasts, and projections. The data is subject to updating, revision, further
verification and amendment without notice. No reliance may be placed for any purpose on the
information or opinions contained in this presentation or any other document or statement, or on the
completeness, accuracy or fairness of such information or opinions therein. No representation or
warranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or
any other person as to the accuracy or completeness or fairness of the information or opinions
contained in this presentation and no responsibility or liability is accepted by any of them for such
information or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any
communication written or otherwise, contained or referred to in this presentation.
Disclaimer
Saudi Aramco: Public
Drives domestic value creation by working with suppliers for mutual benefits
Envisions to improve investment, and maximize long term economic growth and diversification
Focuses on delivering quality jobs, advancing innovation and enhancing global competitiveness
IKTVA is designed to reward Saudi Aramco’s suppliers for the use and development of local labor and sub-suppliers
Localization is a focus for the KSA – Saudi Aramco’s IKTVA program aims to achieve
70% local content by 2021
Saudi Aramco: Public
Agenda – Non-metallic
Session Title Presenter
Opening Salem Alghamdi, ID&SSD
Value Proposition 1: GFRP Rebar Farah Alturkestani, ID&SSD
Value Proposition 2: RTP Farah Alturkestani, ID&SSD
Value Proposition 3: Carbon Fiber Deema Albassam, ID&SSD
Value Proposition 4: Plastic Pallets Deema Albassam, ID&SSD
Saudi Aramco: Public
Agenda – Chemicals
Session Title Presenter
Value Proposition 5: Xanthan Gum
Investment OpportunityMohammed Altwaijri, ID&SSD
Value Proposition 6:Liquid Gilsonite
Investment OpportunityMohammed Altwaijri, ID&SSD
Value Proposition 7: H2S Scavenger Abdullah Abahusain, EXPEC ARC
Value Proposition 8: Proppants Khazisyed Ahmedjeelani, ID&SSD
Saudi Aramco: Public
Establish multiple state of the
art manufacturing facilities
for GFRP Rebar to serve
growing local and
international demand
Also opportunity exists to
become raw material supplier
for key ingredient such as
Direct Roving Fiberglass
The opportunity
1. Current KSA demand is
estimated at ~3,000 Tons per
year
2. Forecasted ~24% annual
growth in KSA demand
derived by Saudi Aramco
deployment strategy
3. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Source: Saudi Aramco
GFRP Rebar Manufacturing Represent an Attractive Opportunity Given The Current
Gaps, Expected Demand and Localization Potential
Saudi Aramco: Public
Life Cycle Cost Installation Reliability
GFRP Rebar Benefits
Significant potential for
cost savings due to
reduced maintenance
cost
Light weight, easily cut
machined, and
transported
Resistant to corrosion,
which increases the life
spam of concrete
structure
Saudi Aramco: Public
Saudi Aramco recently mandated the use of GFRP rebar for the non-critical applications and created
engineering and material standards for the use of GFRP rebar
Engineering Standards and Materials System Specification
Engineering Standard
SAES-Q-001
Criteria for Design and
Construction of Concrete
Structures
Materials System Specification
12-SAMSS-027
Fiber-Reinforced Polymer Bar
Materials for Concrete
Reinforcement
Slab-on-grade Side WalksDrainage
Channels
Coastal Structures
(Splash Zones)Pipe Sleepers Sea Walls
Saudi Aramco: Public10Source: Saudi Aramco Internal Analysis
Steel rebar demand in the Kingdom
is growing at a rate of 3.5%
annually.
Saudi Aramco’s demand for steel
makes up around 9% of the
Kingdom’s total steel demand6.38 6.61 6.84 7.08 7.33 7.58 7.85 8.12 8.41 8.70 9.01
0
2
4
6
8
10
12
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Millio
n T
on
s
KSA and Saudi Aramco Steel Rebar Demand
KSADemand
SaudiAramcoDemand
Steel Rebar Demand in the Kingdom is Growing at a Rate of 3.5% Annually
Saudi Aramco: Public11
• GFRP rebar is qualified to replace
10% of Saudi Aramco’s total steel
demand
• Deployment of GFRP is expected to
start in 2019 and grow at a rate of
24% to reach 23,000 Tons by 2028
• Wider adoption of GFRP rebar in
the kingdom will increase the
demand to potentially exceed 50-
100 thousand Tons annually.
Source: Saudi Aramco Internal Analysis
34
56
8
10
12
15
19
23
0
5
10
15
20
25
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Thousand T
ons
Saudi Aramco GFRP Deployment at Saudi Aramco
24%
GFRP rebar is to Replace 10% of Saudi Aramco’s Total Steel Demand
Saudi Aramco: Public
Key Ingredients are Available Locally and in GCC region
12Source: Saudi Aramco Internal Analysis
Value Chain Mapping
Vinyl Ester
Direct Roving Fiber Glass
GFRP Rebar
Benzene or
Butane
Silica Sand
Localization Opportunity
Available Locally
Key raw material are available
locally.
Potential exist to localize GFRP
Rebar manufacturing.
Saudi Aramco: Public
Value Chain Mapping Analysis
13
• Limited potential for
additional localization as
building blocks are produced
locally
• Potential exist for
manufacturing of direct
roving fiber glass which is a
key input in GFRP rebar
manufacturing. Also there is a
potential to localize VE.
• High potential exist to
establish multiple
production lines for GFRP
rebar to meet the growing
demand in the local market.
• Potential exists to further
develop logistics and supply
chain capabilities such as
• Long haul trucking
• Iso containers
• Loading and
warehousing
• High potential to localize the
following areas:
– Design
– Research and development
– Customer support and
services
– Installation support and
services
Raw Material IntermediateFinished Products
Transportation and Logistics
After Sales & Design
Services
Saudi Aramco: Public
Establish multiple state of
the art manufacturing facilities
for Reinforced
Thermoplastic Pipe to serve
growing local and
international demand
Also opportunity exist to
become raw material supplier
for key ingredient such as
Direct Roving Fiberglass
The opportunity
1. Current KSA demand is
estimated at ~1,000 KM per
year
2. Forecasted ~11% annual
growth in KSA demand
derived
3. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Source: Saudi Aramco
Reinforced Thermoplastic Pipe Manufacturing Represent an Attractive Opportunity
Given The Current Gaps, Expected Demand and Localization Potential
Saudi Aramco: Public
Life Cycle Cost Installation Reliability
Reinforced Thermoplastic Pipes Provide the Following Benefits
RTP provide a lifecycle
cost saving of up to 200-
300% due to resistance
to corrosion and leakage
prevention
Faster installation time
and requires less
resources and man-
hours to install
More reliable due to
corrosion resistance and
reduced number of
connected joints
Saudi Aramco: Public17
• The demand for RTP is
expected to grow in KSA
and the Middle East at a
rate of 11% annually.
• Technology improvements
will avail additional market
for RTP in the Oil ad Gas
industry.
Demand Forecast
Source: Saudi Aramco Internal Analysis
1000 1096 12011316
14411579
17311896
20782277
24952734
667731
801877
9611053
11541264
1385
1518
1663
1823
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
KSA and GCC RTP Demand
KSA GCC
Kilo
mete
r
Saudi Aramco: Public18
Reinforcement Material
Fiber Glass
Applications: Water, Oil and Gas
Aramid Fiber
Applications: Water, Oil and Gas
Carbon Fiber
Applications: Water, Oil and Gas
Steel
Applications: Water, Non-sour Oil
Saudi Aramco: Public19
Key ingredients are available locally and in GCC region.
HDPE/PERT
Direct Roving Fiber Glass
Reinforced
Thermoplastic Plastic
(RTP)
Polyethylene
(PE)
Quarts
Opportunity to localize
Key raw material are available locally.
Potential exist to localize intermediates
such as direct roving fiber glass and
Epoxy
Available Locally
Value Chain Mapping
EPOXY
Saudi Aramco: Public20
• Key Raw material used in RTP manufacturing such as PE and Nylon is already available in the Kingdom.
• Low localization potential to establish additional facilities.
• Potential exist in becoming a reliable supplier of special grades HDPE needed by RTP manufacturers locally and globally.
• Potential exists to localize direct roving fiber glass, which is a key ingredient used in RTP and RTR manufacturing. Also opportunity for other applications such as wind turbine
• As demand is increasing for RTP, there is an opportunity to establish world class manufacturing facility in the kingdom in proximity to both customers and key raw material suppliers.
• Potential exists to further develop logistics and supply chain capabilities such as:
• - long haul trucking
• -Loading and warehousing
• There are no local companies specialized in the installation and maintenance of non-metallic pipelines. ..
• There is a high localization opportunity to establish companies specialized in RTP installation.
Raw Material IntermediateFinished Products
Transportation and Logistics
Installation and After Sale
Service
Value Chain Mapping Analysis
Saudi Aramco: Public
Establish multiple state of
the art manufacturing facilities
of Carbon Fiber to serve
growing local and
international demand
The opportunity
1. Global demand is expected to
grow at 10% annually for the
next 10 years
2. New applications are going to
utilize Carbon Fiber including
Oil and Gas Industry and
Marine
3. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Carbon Fiber Manufacturing Represent an Attractive Opportunity Given The Current
Gaps, Expected Demand and Localization Potential
Carbon Fiber Applications
Energy
Source: HIS Market Report
TransportationInfrastructure
Electronics
Sports
Saudi Aramco: Public
Carbon Fiber Applications
Carbon Fiber applicationsare expected to expand tonew sectors in the comingfew years
-
10,000
20,000
30,000
40,000
50,000
60,000
To
nn
s
Application
2018
2022
Source: Clean Energy Manufacturing Analysis Center Report
Saudi Aramco: Public
Carbon Fiber Demand Forecast
Carbon Fiber globaldemand is expected to growat a rate of 10% annually
83,16691,673
101,050111,386
122,780135,339
149,183
164,442
181,263
199,804
220,242
242,770
267,603
0
50,000
100,000
150,000
200,000
250,000
300,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Ton
sCarbon Fiber Global Demand
Source: Clean Energy Manufacturing Analysis Center Report
Saudi Aramco: Public
Value Chain Mapping
Naphtha PropyleneAcrylonitrile
(ACN)
Ammonia
Polyacrylonitrile
(PAN)
Pretreatment
Oxidation
LT Carbonization
HT Carbonization
Surface Treatment
Sizing
Winidng
Carbon Fiber
Intermediate Processing
Part Manufacturing
Opportunity to localize
Available Locally
Saudi Aramco: Public
Value Chain Mapping Analysis
Acrylonitrile
(ACN)
Carbon Fiber (CF)
Manufacturing Intermediate
Parts Manufacturing
• Opportunity exist in establishing
world-class acrylonitrile
manufacturing plant to serve
increasing global demand
• Leverage advantaged propylene
feedstock from refinery/ crackers
to lower cost
• Currently, Acrylonitrile is not
produced locally
• Establish multiple CF
manufacturing facilities to supply
local and regional growing
demand.
There are different manufacturing processes for Carbon Fiber Reinforced Plastics (CFRP) parts manufacturing. Trends shows opportunities exist in the following manufacturing Processes:
• Resin Transfer Molding (RTM)
• 3D Printing
• Other technologies
Potential applications include:
• Automotive parts
• Construction applications such as repairing stressed structures, rebars, cladding, and bridge construction
• Oil and gas applications such as pressure vessel, offshore platforms, and piping
Saudi Aramco: Public
Establish multiple state of
the art manufacturing facilities
for Plastic Pallets to serve
growing local and
international demand
The opportunity
1. Current KSA demand is
estimated at ~300,000 Pallets
per year
2. Forecasted ~4.4% annual
growth in KSA demand
derived by Saudi Aramco
Deployment strategy
3. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Plastic Pallets Manufacturing Represent an Attractive Opportunity Given The Current
Gaps, Expected Demand and Localization Potential
Saudi Aramco: Public
• Chemical products (spill pallet)
• Industrial parts (blind flange, valves)
• Warehousing: Transportation
(heavy duty)
• Airfreight shipping (light duty)
30
Plastic Pallets Applications
LogisticsStoring
Products DisplayFood & Beverages
Pharmaceutical Industries
• FDA have strict polices
• Sustain the required conditions for sanitary.
• Convenient to sterilize and clean• Less effort with lifting the products.
• Dimensionally stable for holding the product
for a extensive period of time.
Source: WeePallet Website
Saudi Aramco: Public
Pallet market size (in quantity sold) and
structure in 2015
3.8%
6.1%
7.4%
4.7%
Segment Growth1
• Plastic has the highest segment potential growth.
Plastic Pallets Globally
Corrugated Paper
2%
Metal2% Plastic
5%
Wood91%
Plastic
Metal
Wood
Corrugated Paper
+61%
2025
47.3
76.1
2016
Pallet market size in $ Bn
Source: Persistence Market Research, Technavio, BCG analysis
Saudi Aramco: Public
Plastic Pallets’ Benefits
Durability
Sanitation
Better logistics integration
Withstand different weather conditions, rot, chemicals
Easily cleaned and are less prone to contamination
Compatible with automated handling systems
Safer No screws, nails or splinters that
Longevity More than 10 year life span (3-5 years)
Key Advantages
Saudi Aramco: Public
• The demand on plastic
pallets is expected to grow
in the upcoming years in
Saudi Aramco
• Saudi Aramco is targeting
to replace 40% of the
wooden pallets with plastic
pallets
33
Plastic Pallets Demand Forecast
110,559 111,248 111,729 111,980 111,977 111,694 111,102 110,172 108,872 107,165
4,715 9,790
15,360 21,464
28,139 35,428
43,376 52,030
61,440 71,662
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Pallets
/year
Demand Forecast in Saudi Aramco
Plastic
Wood
+ 5%
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
• The demand on plastic
pallets is expected to grow
in the upcoming years in
SA
34
Plastic Pallets Demand Forecast
313,200 326,981 341,368 356,388 372,069 388,440 405,532 423,375 442,004 461,452 208,800 217,987
227,579 237,592
248,046 258,960
270,354 282,250
294,669 307,634
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Pallets
/year
Saudi Arabia vs. GCC Demand Forecast
GCC
SaudiArabia
+ 4.4%
Source: Saudi Aramco Internal Analysis, Takween Report
Saudi Aramco: Public35
• Raw materials that are required for
plastic pallets e.g. polypropylene, and
HDPE resin are both available
locally. Opportunity exist in supplying
the material to pallet manufacturer
locally and globally
• High potential to localize highquality pallet manufacturer andsupply it to end users
• Injection Molding
• Compression Molding
• Thermoforming
• Potential exists to further develop logistics and supply chain capabilities such as storing, loading, and inside warehousing
Raw Material Pallets Manufacturing Transportation and Logistics
Value Chain Mapping Analysis
Saudi Aramco: Public
Key messages
In case you are interested in discussing this opportunity further, please contact
Please Direct All Inquiries To:
Deema Albassam
Nonmetallic Group
Saudi Aramco
Farah Alturkestani
Nonmetallic Group
Saudi Aramco
• Non-metallic sector is offering wide range
of attractive investments in the kingdom
due to availability of key raw materials,
competitive energy prices and future
growth prospect.
• Investments include GFRP rebar,
Carbon Fiber, Plastic Pallets and Re-
infroced thermoplastic pipes
Saudi Aramco: Public
Potential exists to establish
multiple production facilities in
the kingdom for Xanthan Gum
manufacturing
The opportunity
1. Global demand is expected to
grow at 3% annually for the
next 10 years
2. Wider market for Food &
Beverages, oil & gas etc..
3. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Xanthan Gum Manufacturing Represent an Attractive Opportunity Given the current
gaps, expected demand and localization potential
Saudi Aramco: Public
Xanthan Gum Global Applications
39
Others, 6%
Cosmetics, 2%
Pharmaceutical, 4%
Food and Beveragres, 71%
Oil & Gas, 16% Majority of the demand
comes from Food and
Beverage industries with
71% of global demand
Oil and Gas Sector comes
2nd with 16% of the
demand.
Global demand is 167
thousands tons
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
Global demand is expected
to grow at 3% annually and
will reach 224 thousands
tons by 2029
Xanthan Gum Global demand
40
167172
177182
188194
199205
212218
224
120
140
160
180
200
220
240
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Th
ou
sa
nd
To
ns 3%
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
KSA demand is expected
to grow at 3% annually as
well and will reach 2,244
tons by 2029
Xanthan Gum KSA demand
41
1,6701,720
1,7721,825
1,8801,936
1,9942,054
2,1162,179
2,244
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Ton
s
3%
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
Value Chain Process Mapping for Xanthan Gum
42
Fermentation PasteurizationSeparationPrecipitation
DryingMillingPackaging
Saudi Aramco: Public43
• Low localization potential for Crop sources (Wheat)
•There is a potential to localize some intermediate processes such as:
•Glucose syrup
•Ammonium or Nitrate salts
•Protein
•Isopropyl alcohol
•High localization potential exists for Xanthan gum
• Potential exists for Transportation and Logistics Services
• After sales services to maintain quality as per specifications
Raw Material IntermediateFinished Products
Transportation and Logistics
After Sales Services
Value Chain Mapping Analysis for Xanthan GumSeveral gaps across the value chain of Xanthan Gum provide multiple opportunities to support chemicals production localization
Saudi Aramco: Public
Potential exists to establish
multiple production facilities in
the kingdom for Liquid
Gilsonite manufacturing
The opportunity
1. KSA demand is expected to
grow at 6% annually for the
next 10 years
2. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Liquid Gilsonite Manufacturing Represent an Attractive Opportunity Given the current
gaps, expected demand and localization potential
Saudi Aramco: Public
Value Chain Process Mapping for Liquid Gilsonite
Raw Material Transportation Sorting Processing Blending Liquid Gilsonite
• Gilsonite (as a mineral)
• Ethoxylated glycol
• Potassium hydroxide
Transportation and logistics process
It is a process to remove any large
size objects
It is a process to size the mineral and prepare for
blending
Add various chemicals and
Glisonite mineral to produce final
product
Final Product
Saudi Aramco: Public
At a global level,
drilling fluids
command lower
market share
due to very high
usage of
fracturing
chemicals in
North American
shale
production
Contribution of
drilling chemicals
to total spend
in Middle East
is higher than
global due to
higher
prevalence of
conventional
production
11%
30%
19%
30%
10%
Acidizing
Cementing &workover
Drilling fluids Proppants
Fracturing excl. proppants
Drilling & Completion Chemicals Market Breakdown
Global Market segmentation Middle East Market segmentation
21%
57%
5%
15%
Cementing & workover
Drilling fluids
Proppants
Acidizing
Fracturing excl. proppants
Drilling Muds are an important drilling and completion chemicals category,
accounting for ~57% of the Middle East market
Source: Saudi Aramco Internal Analysis, Report: Specialty Chemicals Update program
2%
Saudi Aramco: Public
Liquid Gilsonite KSA demand
KSA demand will grow
at 6 % and will reach
8,583 tons by 2029
4,7935,080
5,3855,708
6,0516,414
6,7987,206
7,6398,097
8,583
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
6%
Met
ric
Ton
s
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
•No existing producers to produce: Liquid Glisonite
•Local players : No manufacturers of Liquid Gilsonite for Drilling & completion
•No dedicated facilities in KSA for inspection, testing and certification of liquid Gilsonite
•No advanced maintenance providers with experience in Liquid Gilsonite formulation and blending equipment present in KSA
•Limited after sales support and/or technical assistance initiatives by either Liquid Gilsonite manufacturers and/or 3rd
party players
Raw MaterialFormulation and
Packaging
Maintenance, Testing and Certification
Technical Assistance
Value Chain Mapping Analysis for Liquid Gilsonite
Several gaps across the value chain of Liquid Gilsonite provide multiple opportunities to
support chemicals production localization
Saudi Aramco: Public
Potential exist to establish
multiple production facilities in
the kingdom for Additives
Manufacturing
The opportunity
1. Saudi Aramco demand is
expected to grow at 6%
annually for the next 10
years
2. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Several opportunities, across manufacturing and services, exist for H2S Scavangers
Saudi Aramco: Public
Additives (H2S Scavenger) have wide application across drilling and completion,
production and finished products
This value proposition will focus on additives for drilling & Completions
Additives for drilling and completion chemicals
Additives to ensure smooth production and transport
Additives to enhance properties of finished products
• The main products in the segment include
– Starches
– Powders and sands
– H2S Scavenger
– Mud thinners
– Liquid chemicals (polyamines etc.)
• The main formulated products in the segment include
– Pipeline drag reducers,
– Anti-icing agents
– Sulphur mitigating additives
• Gasoline (ethanol, octane boosters, deposit control, fluidizers etc.)
• Diesel (deposit control additives, cold flow improvers, lubricity improvers etc.)
• Aviation fuel (octane boosters, anti-icing additives, lubricity and conductivity improvers )
Saudi Aramco: Public
MM
To
n
H2S Scavenger Global demand is growing at 3% annually
Global demand is growing at
3% annually and will reach
296K Metric tons by 2029
220,736 227,358 234,179 241,204 248,440 255,893 263,570 271,477 279,621 288,010 296,650
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
3%
Met
ric
Ton
s
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
MM
To
nH2S Scavenger Saudi Aramco demand is growing at 6% annually
Saudi Aramco demand is
growing at 6% annually and
will reach 8K Metric tons by
2029
6%
4,864 5,156 5,465 5,7936,140
6,5096,899
7,3137,752
8,2178,710
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Met
ric
Ton
s
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
Several opportunities, across manufacturing and services, exist for Additives ( H2S
Scavenger)
Loading
Transporting
Terminal operations &
storage
Supplier
Saudi Aramco currently manages its own logistics and transport and is willing to consider credible 3PL to provide additional services
SME opportunities Key features
• Offer customized on-site logistics
• Supplying iso-containers, conveyer belts, and drums
• Drive loading operations
• Offer state of the art monitoring and measuring systems
• Supplying advanced storage facilities such as tanks and drums
• Enhance value offering via reduced turnaround times
• Transport corrosion inhibitors via tank, drums, or iso-tanks
• Provide pipelines for the transportation of corrosion inhibitors
• H2S Scavenger can be stored in drums, with a capacity of ~13,000L, or in iso-tanks, with a capacity of ~24,000L
• Pumping, monitoring, and measuring equipment required to ensure smooth operations
• To control liquid flow and output to the storage tanks or the well site, different pressure pumps are used
• To manage high volume of H2S Scavenger transfer, manifold trailers are used
• H2S Scavenger can be transported in one of two ways:
– Tank, drum, or iso-tank storage and transported on cargo trailers, van trailers or flatbed trailers
– Pumping stations along a pipeline
H2S Scavneger and logistics value chain
Saudi Aramco: Public
Several gaps across the value chain provide multiple opportunities to support additives
production localization
Number of key molecules already available in KSA i.e
• Monoethanolamine
• Di-butlyamine
• Paraformaldehyde
No existing producers of synthesis compounds necessary to produce: H2S Scavenger and other main additives
Local players :
No manufacturers of additives for Drilling & completion fluids
There is opportunity for packing of these chemicals
•No dedicated facilities in KSA for inspection, testing and certification of additives
•No advanced maintenance providers with experience in additives formulation and blending equipment present in KSA
•Limited after sales support and/or technical assistance initiatives by either additive manufacturers and/or 3rd party players
Chemical SynthesisFormulation and
Packaging
Maintenance, Testing and Certification
Technical Assistance
Saudi Aramco: Public
Potential exist to establish
multiple production facilities in
the kingdom for Proppants
Processing
The opportunity
1. Global demand is expected to
grow at 6% annually for the
next 10 years
2. Attractive cost base including
low logistics, land, utilities, and
labor costs
The business case
Several opportunities, across manufacturing and services, exist for proppants
Saudi Aramco: Public
Proppants account for ~9% of a large Middle Eastern drilling and completion chemicals market
Over 90% of
proppants
are
consumed in
the Americas
due to
significantly
higher
fracking
activity
Proppants have
lower ME
demand
compared to
global due to
lower fracking-
this is expected to
change with
increases in
unconventional
production
11%
30%
19%
30%
10%
Acidizing
Cementing &workover
Drilling fluids
Proppants
Fracturing excl. proppants
2017 Drilling & Completion Chemicals Market Breakdown
Global market segmentation Middle East Market segmentation
21%
53%
15%
Cementing
Drilling fluids ProppantsAcidizing
Fracturing excl. proppants
9%2%
Source: Saudi Aramco Internal Analysis, Report: Specialty Chemicals Update program
Saudi Aramco: Public
Middle Eastern demand is
growing at 6% annually
and will reach 2.2 MM tons
by 2029.
In the Middle East, Proppants demand is expected to grow at a CAGR of 6%
ME Proppants expected market size evolution (2019-2029)
1,2681,342
1,4191,501
1,5881,679
1,7761,883
1,996
2,116
2,243
700
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
2,500
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Vo
lum
e (
‘000 M
T)
564 589 634380 403 425 450 476 503 532 672Value($ MM)
6%
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
KSA demand is growing at
6% annually and will reach
1.7 MM tons by 2029.555
833
1,0881,178
1,230 1,2681,350
1,4251,515
1,6051,703
0
200
400
600
800
1000
1200
1400
1600
1800
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Vo
lum
e (
‘0
00
MT)
Proppants demand in KSA is expected to grow at a rapid CAGR of 6% till 2029 as unconventional production increases
KSA Proppants demand market size (2019-2029)
Value($ MM)1
6 %
511369 380 405 427 454 481250166 326 353
Source: Saudi Aramco Internal Analysis
Saudi Aramco: Public
Our goal is to optimize the total value delivered through fracking
1. Long-haul Transportation
2. Transloading 3. Trucking to well 4. Fracking operations
Description Proppant is transported by flatbed truck or rail cars (if available and cost effective)
Proppant is stored and/or transloadedto sand tankers for delivery to wells
Proppant is constantly delivered to well and offloaded at the rate of 4–5 trucks/hour
Proppant is conveyed from temporary storage to the operation
Supplier/ Port
Transloads(close to field)
Drilling pad321 Operations4
Smart Sand / Canadian Pacific unit trains
US Silica high-velocity transloading facility
12 Solaris mobile silos, 2500 ton capacity
Sand king
Typically managed by Proppant Manufacturer Typically managed by OFS
Logistics Chain for Proppant
Saudi Aramco: Public
Several gaps exist across the Proppants value chain presenting opportunities for localization
•Raw minerals required for proppants e.g. silica, alumina are readily available in KSA
•Limited processing of raw materials into products such as resin coated sand and sintered bauxite
•Very nascent market in KSA, with limited blending and formulation facilities
•Potential exists to further develop logistics and supply chain capabilities such as
-Long haul trucking
-Trucking to well
-Loading and storage
•Will typically be done directly by the OFS- staff and equipment will be from outside KSA.
•Potential to develop technical training institutes to develop local talent (e.g., Saudi Aramco drilling academy)
MiningProcessing and
FormulationTransportation and
Supply Chain Fracking Operation
Saudi Aramco: Public64
Potential exists to establish multipleproduction facilities in the kingdom formanufacturing of:
• Xanthan Gum
• Liquid Gilsonite
• H2S Scavenger
• Proppants
Key messages
Mohammed Altwaijri
Industrial Development
Saudi Aramco
In case you are interested in discussing this opportunity further, please contact
Please direct all inquiries to
Khazisyed Ahmedjeelani
Industrial Development
Saudi Aramco