Bids for Aramco Dow gas plants expected end of June

24 May 2011

Plants will be built on a build-own-operate-transfer basis

The partners behind the $18bn Aramco Dow petrochemicals joint venture are expected to receive the bids for the contract to build the hydrogen, carbon monoxide and ammonia plants at the complex by the end of June.

Saudi Aramco and Dow Chemical has prequalified four companies for contract and released the tender to January, making it one of the first to be released for the giant complex in Jubail (MEED 7:1:11).

Unlike the other packages being tendered, the plants will be built on a build, own, operate and transfer (BOOT) basis and will be self-financed by the winning contractor.

“There are only four companies because not many companies can carry out the technical work as well as finance the deal themselves,” a source familiar with the contract says. “This is also the reason why the companies have had six months to formulate bids.”   

The four companies bidding for the contract are:

  • Air Liquid Arabia (France)
  • Air Product & Chemical/Abdullah Hashim Industrial Gases & Equipment Company (US/Saudi Arabia)
  • Linde Group (Germany)
  • Paraxair (US)

Air Liquide has experience in the field as it is currently executing a similar project for Saudi Aramco at its $9bn Yanbu refinery project on the west coast of the kingdom (MEED 15:9:10).

The company will invest about $450m to build two hydrogen units that it use to supply hydrogen ‘over the fence’ to the facility. It is the first time the hydrogen supply has been outsourced.

It is believed that the Aramco package will require a higher investment from the winning bidder than $450m.

“This is how most major refineries and petrochemical complexes in the region will source hydrogen and other gases from now on,” the source says. “It works well for both sides.”

The source adds that due to its previous experience Air Liquide will most likely consider itself the early favourites, but he expects the main competition to come from Linde.   

“At conferences, Linde has spoken about its desire to enter this market in the Middle East, so I think it will be competitive on this particular contract,” the source says.

The Aramco Dow complex will be constructed at Jubail Industrial City 2 in the Eastern Province of the kingdom. A lease has been signed and the new location is about 1 kilometre away from the Saudi Aramco Total Refining and Petrochemical Company (Satorp) project.

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