South Korea’s Daelim has won a $425m deal to build a new plastics plant in Saudi Arabia, a source close to the bidding process tells MEED.
Petrochemicals maker Saudi Kayan, the client on the job, sent a letter of intent to the South Korean firm on 23 December, the source says. The deal is worth $425m, significantly more than the $300m budget originally set for the job.
Under the terms of the deal, Daelim will build a 300,000 tonne a year (t/y) low density polyethylene (LDPE) plant at Saudi Kayan’s existing petrochemicals complex at Jubail. LDPE is a basic plastic used in a wide range of household goods.
Daelim and Tawian’s China Technical Consultants Incorporated (CTCI) submitted prices for the engineering, procurement, and construction deal on 20 December. This marked the second time they had set out cost proposals for the job.
In September, they bid for the deal along with South Korea’s Samsung Engineering but Kayan’s main shareholder Saudi Basic Industries Corporation decided that the prices were too high. Samsung pulled out of the bidding and the two firms entered into talks with Sabic and Kayan.
The deal is the second in a week for Daelim, who announced on 23 December that they had won the $400m EPC deal to build a 300,000-tonne-a-year (t/y) ethylene dichloride plant and a 250,000-t/y caustic soda plant at Jubail for Saudi Arabian Mining Company (MEED 23:12:2009).