Saudi Aramco and the US’ Dow Chemical have confirmed that they will build their planned $15bn-plus joint venture petrochemicals complex at Jubail rather than Ras Tanura as had originally been planned.
The announcement shows that the firms plan to move ahead with the project, but does not clarify what the eventual configuration of the complex will be.
MEED reported in March that the partners were considering a site change for the complex and in April confirmed the move to Jubail Industrial City 2 in Saudi Arabia’s Eastern Province as part of changes to $30bn of downstream projects in the kingdom. The biggest impact of the decision was the cancellation of Aramco’s plans for an $8bn expansion of the existing Ras Tanura refinery.
The move was part of a wider review of the project, covering scope and construction costs. To date, design and planning costs have topped $700m.
Aramco and Dow declined to comment on the move until 3 August when they released a joint statement to confirm the selection of the Jubail site. They also revealed that front end engineering and design (FEED) studies for the project are now due to be completed by mid-2011. The FEED study was originally scheduled for completion by the end of 2009.
The partners made a final decision on the new size and scope of the complex during a series of meetings in June and July, prompted by concerns within Aramco that the project was not moving quickly enough, sources close to the scheme tell MEED.
Proposed units, when the plant was first discussed in 2007, included a mixed-use ethane/naphtha steam cracker to produce 1.2 million tonnes a year (t/y) of ethylene and 400,000 t/y of propylene, an aromatics complex to produce 400,000 t/y of benzene and 460,000 t/y of paraxylene and a mix of specialty products.
The partners did not disclose any details of the reworked scope of the plant and declined to comment on the changes when approached by MEED.
However, Dow chief executive Andrew Liveris said that the complex would be configured to produce specialist “performance” chemicals during a 3 August telephone conference with analysts to discuss the company’s second quarter 2010 earnings.
Its output will include propylene oxide, epichlorohydrin and acrylic acid he said, adding that the complex will be modelled on Dow’s existing production facilities in central Germany, which are integrated into a wider value park, where other companies manufacture goods using feedstock provided by Dow.
Contractors in Saudi Arabia say that they expect the partners to start prequalifying them to bid on the contract to prepare the Jubail site in September and October and that the deal could be completed before the end of the year.
Dow and Aramco could start prequalifying engineering firms to bid on the main construction contracts for the scheme in the first quarter of 2011, interested executives say.
A final investment decision is unlikely to be made on the project until the FEED has been completed.The partners will offer a 35 per cent share of the project to the public at an undisclosed date, Liveris said.