Consortium bids low for Borouge plastic expansion deals

19 May 2010

Polyolefins and low-density polyethylene contracts worth an estimated $1.95bn

A consortium of South Korea’s Samsung Engineering and Italy’s Tecnimont is the favourite to win two of the main construction contracts on the third-phase expansion of the Abu Dhabi Polymers Company (Borouge) Ruwais plastics complex after submitting the lowest bids worth an estimated $1.95bn, sources close to the project tell MEED.

The consortium bid $1.45bn for the main polyolefins unit and just under $500m for a low-density polyethylene (LDPE) plant in a competitive 16 May bid round, seeing off competition from a consortium of the UK’s Petrofac with South Korea’s Daelim, Taiwan’s China Technical Consultants (CTCI), and Germany’s Uhde (MEED 16:5:10).

Contractors expect Borouge to make awards on both deals quickly, as it is keen to push ahead with the project as soon as possible.

“I don’t see there being any problem with Samsung or Tecnimont on this, especially as Tecnimont is the design contractor so I would imagine the contracts could be sorted by the end of May or early June,” says one source with close links to the Borouge management.

Tecnimont was awarded the front end engineering and design (Feed) contract to design the polyolefins unit, the LDPE plant and the main supporting infrastructure, the utilities and offsites, in June 2009 (MEED 6:7:09).

The polyolefins plant will convert the chemical building blocks ethylene and propylene into the basic plastics polyethylene and polypropylene while the second deal covers the construction of specialised plant to convert polyethylene into low-density polyethylene (LDPE), a plastic used to make piping.

In July 2009, Borouge awarded a $1.07bn deal to Germany’s Linde to design and build a 1.5-million tonne a year (t/y) cracker unit to break down ethane, a component of natural gas, into ethylene, while the local Al-Asab General Transportations & Contracting Establishment won a $300m deal to prepare the Ruwais site for the expansion in November 2009 (MEED 6:7:10).

Borouge is still in the process of tendering two other deals on the project. The first is for the offsites and utilities, which is estimated to be worth more than $1bn. Commercial bids are due in on this contract 23 May.

The second is worth around $200m and covers the construction of another specialist plastics plant, which will produce cross-linked polyethylene, used in tubing. Borouge is due to tender the engineering, procurement and construction (EPC) contract to build this plant by the end of May.

The Borouge 3 project will boost the firm’s plastics production at Ruwais by 2.5 million tonnes a year (t/y) to 4.5 million t/y, making it the largest complex of its kind in the world.

The company is currently in the process of commissioning its second production unit, Borouge 2, which will produce 540,000 t/y of polyethylene and 800,000 t/y of polypropylene. The company currently produces around 600,000 t/y of polyethylene at Ruwais.

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