Eric Watkins
Middle East Correspondent
NICOSIA, May 3 -- Even as Saudi Arabian officials pledged better security in the country after a terrorist attack at its oil and petrochemical hub of Yanbu on the Red Sea, the company that was targeted has announced the evacuation of its employees from the port city.
The attack, which took place in the offices of ABB Lummus on Saturday, left 6 dead and up to 33 wounded. ABB Lummus is in Yanbu to upgrade the Yanpet petrochemical plant, built by the company 5 years ago and jointly owned by ExxonMobil and Saudi Basic Industries Corp. (Sabic).
Petroleum facilities in the complex did not come under attack, and state-owned Saudi Arabian Oil Co. (Aramco), which runs oil installations in the country, said its facilities and personnel were not affected. "Normal operations are continuing at all of the company's installations," Aramco said.
The attack nonetheless was likely to have an effect on oil markets already shaken by militant attacks on export facilities in Iraq late last month (OGJ Online, April 26, 2004).
"The cornerstone of oil worries is supply disruption, and there has been cause for alarm after the recent attacks in Saudi Arabia and Iraq," said Peter Gignoux, senior oil advisor at New York-based GDP Associates. "Oil traders have vivid imaginations and they will read the worst possible into this," he told Reuters.
The country's second-largest industrial city, Yanbu is the Western terminus for two major pipelines: the 5-million b/d East-West crude oil pipeline (Petroline) and the 290,000-b/d Abqaiq-Yanbu natural gas liquids pipeline, which runs parallel to Petroline and serves Yanbu's petrochemical plants.
Yanbu's King Fahd Industrial Port, able to up to 5 million b/d of crude oil delivered from Abqaiq through Petroline, also is the largest oil and petrochemical exporting complex on the Red Sea.
Some saw Saturday's attack as portending worse to come. "I'm concerned that this is going to happen on a far bigger scale," a Saudi business consultant told Reuters.
The nightmare scenario is a large attack at the main oil facilities across the country at the export terminal of Ras Tanura, which can load up to 6 million b/d for export, or at Abqaiq, which handles two-thirds or so of the country's oil output.
"We can't rule out the possibility that secret cells are working on a massive strike on Ras Tanura or Abqaiq," the consultant said. "Hitting Abqaiq would be catastrophic. It would bring the kingdom to its knees."
Crushing the terrorists
In an effort to contain such worries, Crown Prince Abdullah bin Abdul Aziz, the kingdom's de facto ruler, on Saturday vowed that Saudi authorities would crush the terrorists. "We will strike with an iron fist at anyone who undermines the security of this country. We will pursue this deviant group for 20 or 30 years [if necessary]," he said.
In a statement from Houston, ABB Lummus said it was constantly monitoring the security situation in Saudi Arabia, but that "In light of recent events in Yanbu, ABB has decided to transfer all foreign employees involved in the attack from the Yanbu site in the coming days."
The shootings took place around 7 a.m. on Saturday morning local time when three Saudi nationals wearing Coast Guard uniforms, entered the premises using pass keys and let another one in through an emergency exit.
Once in the office complex, the shooters separated Western employees from other nationalities and even singled out senior company employees, including the project manager, the construction manager, the engineering manager and the overall administrator.
Altogether, they shot to death six people, including two Americans, two Britons, an Australian, and a Saudi security officer. Two ABB engineers also were reported among the wounded.
Saudi security forces killed all four terrorist suspects. Company officials said the gunmen were not ABB employees, as initially had been reported. It appears that some of them worked elsewhere on the industrial complex, giving them the passes needed to get through security, the officials said.
The project
ABB Lummus has been upgrading plant facilities under the $2.8 billion Yanpet complex expansion project, which won initial approval in 1996 but only got under way in February 2001.
The facility includes an ethylene plant, an ethylene glycol plant and a polymer plant.
Fluor Daniel was the project engineering, procurement, and construction service manager, while the $500 million contract to build the ethylene plant was awarded to ABB Lummus through its US division.
ABB Lummus provided the process technology and licenses, basic and detailed engineering, and procurement of all equipment and material, and was responsible for the construction and commissioning of the plant.
The expansion added a second 800,000 tonnes/year (t/yr) ethylene cracker to the complex, bringing Yanpet's total capacity to 1.7 million t/yr. Other derivative products produced include 410,000 t/yr of ethylene glycol, 260,000 t/yr of polypropylene, and 125,000 t/yr of pyrolysis gasoline.
Last December, Sabic announced plans to construct a petrochemical complex at Yanbu as well. The new 1.3 million t/yr cracker is expected to come on stream in 2007.
In addition, plans call for the construction of an 800,000 t/yr polyethylene plant, a 700,000 t/yr ethylene glycol plant, and a 350,000 t/yr polypropylene plant.
Sabic executives said the new complex is part of the company's strategy to increase its competitiveness (OGJ Online, Dec. 22, 2003).