Awards near for Rabigh downstream units

05 August 2005
Contract awards are imminent on three downstream process unit packages on the estimated $8,000 million world-scale Rabigh refining and petrochemicals complex. The client, the joint venture of Saudi Aramco and Japan's Sumitomo Chemical Company, will award the contracts on a directly negotiated basis.

The three packages, totalling more than $2,000 million, involve the construction of three polyethylene units (PE), each with capacity of 300,000 tonnes a year (t/y), covering the production of linear low-density polyethylene (LLDPE), easy processing polyethylene (EPPE) and high-density polyethylene (HDPE); two 350,000-t/y polypropylene (PP) units; one 600,000-t/y ethylene glycol (EG) train; and a 200,000 t/y propylene oxide (PO) unit.

The first and largest package, worth about $1,000 million, covers the construction of the two trains of LLDPE and EPPE - the new class of PE - as well as one of the PP lines. The second package, worth about $500 million, calls for the construction of the single EG train and the PO unit. The third contract, worth an estimated $500 million, covers the HDPE train and the other PP line.

The client is understood to be negotiating with several international contractors for the packages, including Italy's Tecnimont, Mitsui Engineering & Shipbuilding Company (MESC) and SumitomoCorporation, both of Japan, and Germany's Uhde.

In an attempt to control escalating costs and reduce risk for the contractors, which are faced with uncertainty over material and equipment prices as well as subcontractor shortages, Aramco/Sumitomo will initially award the contracts on a cost reimbursable basis. They will be converted into lump-sum turnkey (LSTK) once most of the detailed engineering and the procurement of some long-lead items is completed.

Ethylene feedstock for the downstream units will be sourced from Rabigh's ethane cracker, for which Japan's JGC Corporationis the engineering, procurement and construction (EPC) contractor. The exception will be the PP unit on the third package, which will be dual-fed with propylene and methane. Europe's Basellis the technology licence provider on the units.

UK-based Foster Wheeler Energyis the overall project management services (PMS) contractor on the Rabigh programme. Sumitomo-Mitsui Banking Corporation (SMBC)is acting as financial adviser (MEED 15:7:05, Cover Story).

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