Borouge to tender Ruwais expansion deals

01 October 2009

Third phase of petrochemicals complex will be the largest in the world

Abu Dhabi Polymers Company (Borouge) will tender three $1bn-plus construction contracts in October as part of its plans to make its Ruwais petrochemicals complex the largest in the world.

The engineering, procurement and construction (EPC) contracts are the last major deals that Borouge needs to award on the third-phase expansion of the complex. Once the scheme, Borouge 3, is complete in 2013, the company will produce 4.5 million tonnes a year (t/y) of plastics at Ruwais.

Potential bidders expressed interest in the deals on 17 September. They say Borouge will release formal tenders before the end of October.

The first contract covers the construction of a polyolefins unit, a chemical used to make the basic plastics polyethylene and polypropylene. A list of firms prequalified for this deal was not available at the time of going to press.

The second is for the construction of a specialised plant, which will convert the polyethylene produced at the first unit into low-density polyethylene (LDPE), a plastic used to make piping.

Borouge licensed the technology for the LDPE plant from the US’ Lyondell Basell. The US company has only approved Germany’s Uhde, Italy’s Tecnimont and the UK’s Simon Carves, to build plants using its technology although other contractors may work with any of the three companies on a plant.

The third contract covers buildings and utilities. This includes seawater cooling systems, chemical and oil product storage systems, and the main buildings at the site.

Some of the firms prequalified for this deal are Spain’s Tecnicas Reunidas, Germany’s Uhde and Linde, Italy’s Saipem, the UK’s Petrofac, the US’ Fluor and South Korean contractors including Samsung Engineering, SK Engineering & Construction, and Hyundai Heavy Industries.

Borouge awarded the $1.1bn contract to build a cracker, which breaks the oil product ethane into the basic chemicals ethylene and propylene, to Linde in July 2009 (MEED 5:7:09).

Executives examining the deal do not expect Borouge to award the remaining two contracts until the second quarter of 2010.

“The tender will be released at the end of October, but I wouldn’t expect technical deadlines before January 2010 and commercial deadlines before March or the second quarter,” says one executive at a firm hoping to bid on the deal.

Borouge awarded the front-end engineering and design (Feed) contract for the three remaining construction packages to Italy’s Tecnimont in July (MEED 7:7:09). The Italian contractor should finish the job in April 2010. The US’ Jacobs Engineering won a second Feed contract on 29 September for further work on the polyethylene and polypropylene plant.

Borouge declined to comment on a likely timeframe for EPC contract awards.

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