Following SABIC, Yansab, Saudi Kayan and Petrochem’s announcement yesterday, Tasnee, Sipchem and Advanced announced a curtailment of feedstock supplies to the company plants of approximately 41%, 40% and 40%, respectively, as of Sunday 15 Sept 2019, following a reduction in oil production by Saudi Aramco. According to the announcement, all three companies are still evaluating the final effects of this shortage to better determine the financial impact, and any developments will be disclosed according to relevant rules and regulations. On the other hand, Nama Chemicals announced that there will be no shortages of feedstock supply, as it has been communicating with the main suppliers regarding feedstock supply. The feedstock curtailments should have an impact on Tasnee’s, Sipchem’s and Advanced’s financial statements, which will be disclosed once any developments arise. It remains unclear when full production will be restored but Aramco have indicated that they are targeting bringing back one third of the lost production (c2mn barrels/day) on Monday (today), with sources indicating it could take several weeks for full production to be restored. 

Yousef Husseini
 
SIPCHEM: SAR16.70 as of 15 Sep. 2019, Rating: Buy, TP: SAR22.00/share, MCap: USD3,265mn, SIPCHEM AB/2310.SE
 
Advanced Petrochemicals: SAR54.00 as of 15 Sep. 2019, Rating: Buy, TP: SAR62.00/share, MCap: USD2,833mn, APPC AB/2330.SE
 
National Industrialization Company: SAR12.76 as of 15 Sep. 2019, Rating: Buy, TP: SAR16.50/share, MCap: USD2,389mn, NIC AB/2060.SE