Economic viability of the Saudi Arabian petrochemical industry: methanol as a case study

Thesis/Dissertation · Thu Jan 01 00:00:00 EST 1987

OSTI ID:5991148

Al-Salem, A M

In the pursuit of the diversification strategy, Saudi planners invested a sizable amount of oil surplus in export-oriented petrochemical projects at Jubail and Yanbu. For this strategy to be realized, the projects must be economically viable. Economic viability entails the presence of petrochemical plants that are self-sustaining and self-perpetuating in the long run without state subsidies. In view of the projects, heavy reliance on state subsidies along with their location in a remote area, far from the source of demand, it is hypothesized that, barring a significant shift in the development strategy, a dynamic industrial sector focusing on the development of the petrochemical industry is unlikely to emerge in Saudi Arabia and that the export-led growth strategy that accords it a key role in the nation's development is not likely to prove viable. In verifying the hypothesis, a comparative cost analysis was conducted comparing the cost structure at the Ibn-Sina methanol plant to a similar plant in Alberta, Canada. According to the authors forecast of methanol revenues and costs, the Saudi petrochemical industry exemplified by the methanol project emerges to be as a net absorber of rather than contributor to the nation's financial resources and in this regard appears to impede the process of capital formation and economic growth.

• Research Organization: California Univ., Riverside (USA)
• OSTI ID: 5991148
• Resource Relation: Other Information: Thesis (Ph. D)
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
03 NATURAL GAS
29 ENERGY PLANNING
POLICY AND ECONOMY
METHANOL PLANTS
ECONOMIC ANALYSIS
PETROCHEMICAL PLANTS
SAUDI ARABIA
CANADA
CAPITAL
COMPARATIVE EVALUATIONS
ECONOMIC DEVELOPMENT
ASIA
CHEMICAL PLANTS
ECONOMICS
INDUSTRIAL PLANTS
NORTH AMERICA
020500* - Petroleum- Products & By-Products
030400 - Natural Gas- Products & By-Products
294000 - Energy Planning & Policy- Fossil Fuels