Chemicals Industrial City: A world-beating facility in Abu Dhabi

24 July 2009

Tacaamol, the first stage of Chemicals Industrial City, will be one of the largest integrated petrochemicals complexes on the planet.

Abu Dhabi National Chemicals Com-pany’s (Chemaweyaat’s) Tacaamol facility will be one of the world’s largest integrated petrochemicals complexes when it is completed in 2014. The ethane cracker and aromatics units at the complex that will break down several kinds of naphtha - a product of crude oil - into basic chemical feedstocks will be the biggest of their kind in the world.

The complex is the first of 12 separate schemes that will make up Chemicals Industrial City, and at the peak of construction the project will employ thousands, if not tens of thousands, of people at sites scattered across the globe. A scheme on this scale is not undertaken lightly and, before ground is broken to prepare the site at Taweelah in late 2010 or early 2011, years of preparation will have gone into the project.

The scale and complexity of the Tacaamol project can be seen most clearly when compared with schemes elsewhere. Abu Dhabi National Polymers Company’s (Borouge’s) Borouge 2 project, for example, will use a 1.4 million-t/y ethylene cracker to produce 540,000 t/y of polyethylene and 800,000 t/y of polypropylene.

Tacaamol, by contrast, will produce 6.2 million t/y of marketable petrochemicals. Its aromatics unit will strip out 1.4 million t/y of paraxylene, which is used in the production of plastic bottles, and 850,000 t/y of benzene, a key raw material for the production of poly-styrene and polycarbonate, from 2.9 million tonnes a year of medium and heavy naphtha.The unit will also produce the liquefied petroleum gases propane and butane, along with light naphtha, which is rich in simple carbon structures such as ethane.

A further 3.3 million t/y of light naphtha will be processed in a second unit at the centre, which will include a cracker producing about 1.4 million t/y of ethylene and 720,000 t/y of propylene.

Other chemicals produced by the plant will include a total of 6.2 million t/y of paraxylene, benzene, cumene, phenol, acetone, polycarbonate, propylene, polypropylene, ethyl glycols, ethyl amines, high-density polyethylene and low-density polyethylene.

Hydrogen produced by the naphtha cracker and the aromatics unit will be converted into the fertilisers ammonia and urea, and the solvent melamine. 

Ethylene and propylene are largely used in synthetic plastics, fibres, packaging and coatings. Tacaamol’s production will give the company the scope to make polycarbonate casings, chemical solvents and plexiglass.

“The potential uses are hugely diverse,” says an executive at one European petrochemicals producer. “I am not saying that the sky is the limit for what they will be able to produce, but it is not too far off.”

With the addition of two 650,000-t/y propane dehydrogenation units at the second phase of the Chemaweyaat complex, Al-Chemeya, the variety of chemicals produced will grow, and a further 10 schemes will be rolled out over the coming years.

“When you plan for a project, it is normally for five years at least,” says one local oil and gas contractor. “With this, they have had to plan for 20.”

The development process is further complicated by the complex technologies employed throughout the plant. For Tacaamol alone, Chemaweyaat will need licences for about 20 different processes. Again, strategic acquisitions by Abu Dhabi’s International Petroleum Investment Company (Ipic) mean that some of these are likely to be available to the company, but the process will not be without its challenges. Nevertheless, the model for the development of the complex follows those used throughout the industry.

“You start off as you would in any business with a broad business proposition, moving from stage to stage,” says Connie Evans, sales director at US automation consultant Honeywell. “You do a feasibility study to see if the project works in terms of the market, the site and the economics. By the end you have a rough idea of the cost of all the major items involved in putting it together. It then comes to an economic decision.”

Bidding process

Chemaweyaat will not comment on the expected cost of the Tacaamol project, but early estimates from contractors suggest the development will cost about $11bn. Industry analysts say Chemicals Industrial City could costs tens of billions of dollars in total. 

“If the economic case for a project such as Chemicals Industrial City [is proven and it] gets the go ahead, then you may take it into another feasibility study or you may run it directly into the front-end engineering and design [Feed] stage,” says Evans.

Ali al-Dhaheri, project co-ordination manager at Chemaweyaat, told the MEED Abu Dhabi Megaprojects 2009 conference in May that the Feed stage of the project would begin in 2009. But this does not necessarily mean contacts will be awarded this year.

“With Feed, you need to work out which parts of the plant you want to break into packages, and then which companies have that kind of experience,” says an executive at one international engineering firm. “There will be things such as offsites and utilities to consider, the basic infrastructure, the ground work for the project.”

“Once you have your firms, you ask them to express interest in the project, you prequalify them, and then you work out when you are going to ask them to bid,” says Al-Dhaheri. “They will need the data on the project to work from, so they know what they are bidding on. There are normally two rounds of bidding - technical and commercial - where you lay out the engineering you will do and then the prices for your services. Once they have the first bid, the technical bid, they will want to talk through that with you. It takes a while, and it is a lot of work for a lot of people”

At this stage, it is also common to appoint a project management consultant to oversee the design phase, and sometimes even the construction phase. In the case of Tacaamol, Chemaweyaat signed a letter of intent with Australia’s WorleyParsons in January 2009 for engineering and management services on the scheme. At the time, the two companies said they hoped to continue the relationship in later years.

“It is [also] common for the process technology to be decided before the Feed stage,” says Evans. “In the case of Chemaweyaat, quite a few of the process licences were already decided because of the involvement of some of the business partners that own their own process technology.”

Feed awards

To date, Chemaweyaat will only say that Austria’s Borealis will provide the licences for polypropylene, polyethylene, phenol, melamine and cumene.

Canada’s Nova Chemicals and Borealis both have the technology for linear low-density polyethylene, another key licence that will have to be acquired.

Industry experts also tell MEED that cracking technology licences are generally awarded as part of a combined Feed and engineering, procurement and construction (EPC) contract. Borouge awarded German technology and construction group Linde such a contract on its Borouge 3 project for $1.075bn on 2 July. Chemaweyaat declined to comment on  its contracting strategy.

“Once the bidding round on the Feed is over and contracts have been awarded, it will be a long time, maybe one year or more, before that is completed,” says the engineering executive.

“With a project like this, you can expect some to-ing and fro-ing, because there will also be some cost estimation going on, and because it is so complex and huge. Then comes the EPC side of things.”

“Once the Feed is done, you break it down into individual EPC packages and the project management consultant, along with the client, manages the selection of EPC contractors to execute the various packages,” says Evans.

“That is a long process on a project like this, and they may need to appoint individual contractors to oversee the construction process as well,” says the engineering executive. “Then you build.”

Germany’s Man Ferrostaal, in which Ipic has a 70 per cent stake, has already been signed up to provide EPC services for the complex producing fertilisers ammonia, urea and melamine. Beyond this, little is known about when or how Chemaweyaat will tender the contracts.

Sources with knowledge of the project say that Feed contracts will be awarded in 2010, with the EPC tendering process starting in 2011. Chemaweyaat has set a 2014 start date for the project, but contractors who have worked on projects half the size of Tacaamol say this is likely to be a sliding scale.

“With a project of this magnitude, there is always slippage,” says a source at one international contractor working in Abu Dhabi.

“Six months here and there is not that much of a deal on a project this size. You would rather get it right the first time, because if something goes wrong with a $10bn plant, it will cost a fortune to get it right.”

Evans says that automated controls contractors such as Honeywell will often start work on a project early on to make sure that mistakes are not made during the crucial start-up phase.

“What has been a game changer recently has been getting us involved much earlier in the project cycle and putting us much deeper into the process,” he says. “We [automated systems providers] are part consulting, part engineering and part technology provider. We assist our clients so that they are ready the day the plant starts up.

“People are trained, and management systems and advanced applications are already in place. We help ensure that facilities start up at full capacity, with all of the business processes and enabling technologies in place. That will allow the user to reach profitability sooner than if you followed traditional business ramp-up methodologies.”

Before the plant is started up, Chemaweyaat will also need to take care of the small matter of putting in place a massive network of distribution, sales and marketing operations across the globe, as these will need to be in place to operate from day one, says the European executive.

“That is another massive and extremely costly project in itself,” he says, adding that the experience of the companies owned by Ipic will be crucial to this stage of the process. “But it has to be done, so that its produce can find a home. Then they start again with Al-Chemeya and keep going for 20 years.”

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