Daelim expected to win Aramco Dow cracker package

27 June 2011

South Korean contractor expected to win first major package at $18bn petrochemicals complex in Jubail

Oil major Saudi Aramco is expected to award South Korea’s Daelim Industrial the engineering, procurement and construction (EPC) contract for the mixed-feed cracker package at its planned $18bn Aramco Dow petrochemical complex in Saudi Arabia.

The oil giant has spent the past few weeks meeting Daelim and its nearest rival South Korea’s GS Engineering & Construction (GS E&C) in Seoul to determine which contractor will win the contract.

“Both companies are more than capable of executing this project,” says a source familiar with the deal. “In the end, it has boiled down to the lowest price and that is Daelim.”

MEED reported in early June that GS E&C’s price was about 3-4 per cent higher than Daelim’s and that the budget was expected to be less than $1bn (MEED 10:6:11).

If successful, Daelim will have to work alongside France’s Technip, which is providing the technology for the scheme, but this is not thought to be a problem.

The type of cracker that will be used at the Aramco Dow complex in Jubail has been the source of much speculation. Now it is clear a mixed-feed cracker using ethane and naphtha will be built that will produce 1.2 million tonnes a year (t/y) of ethylene and 400,000 t/y of propylene.

Aramco/Dow project timeline

2011

Q1 2011: EPC tenders released

Q2/3 2011: EPC proposals submitted

Q4 2011: EPC contract winners announced

2012

Q1 2012: Construction work to start

2015

Q1 2015: Commissioning to begin

Q4 2015: Full start-up of production

EPC=Engineering, procurement and construction Source: MEED

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