Contractors submit final bids for $2bn Alexandria petrochemicals contract

05 May 2010

Bidders expect Egypt to announce winner in the third quarter of the year

At least four international engineering firms have submitted final bids for the $2bn contract to build a new petrochemicals complex at Alexandria on Egypt’s northern Mediterranean coast.

Tecnimont and Saipem, both of Italy, submitted commercial proposals for the deal in late March along with South Korea’s Samsung Engineering and Japan’s Toyo Engineering & Construction.

The firms submitted technical bids to the client on the project, Egypt Petrochemicals Holding Company (Echem), on 28 February (MEED 15:3:10).

Sources close to the project say that the client plans to start technical and commercial clarification discussions over the bids in May.

Engineering contractors expect Echem to ask for a fresh set of prices in June, and to award the engineering, procurement and construction contract early in the third quarter of 2010, with work due to start before the end of the year.

“Normally with Echem they don’t take your first commercial bid but instead ask for better prices,” says a source at one of the bidding firms. “They will start direct negotiations as soon as they have got all of the clarifications out of the way.”

The plant will crack ethane, a component of natural gas, breaking it down into the chemical ethylene, which will be used to produce the basic plastic polyethylene. It will produce 750,000-1 million tonnes a year (t/y) of ethylene.

The technology for the complex will be supplied by the US’ ABB Lummus, which completed front-end engineering and design studies for the scheme in September 2009.

Echem is responsible for implementing the country’s 20-year petrochemicals masterplan, which was unveiled in 2002. Despite being one of the biggest oil and gas producers in the world, the country’s petrochemicals production totalled just 600,000 t/y in 2002. The plan involves investments of $10-20bn (MEED 17:7:08).

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