Bidders asked to extend bid validity to end of 2010
Egyptian Petrochemicals Holding Company (Echem) has asked international contractors bidding for a deal to build a new $2bn petrochemicals plant at Alexandria to extend their bid bond validity until the end of the year.
The state-owned petrochemicals producer was due to open the prices for the engineering, procurement and construction (EPC) deal in July or August, but contractors are still waiting for news, a source close to the deal tells MEED.
Bidders for Echem cracker
- Toyo (Japan)
- Samsung Engineering & Construction (South Korea)
- Saipem (Italy)
- Tecnimont (Italy)
“Echem will open the price when they have settled the shareholder financing for the deal. They asked for bid bond extensions to the end of the year, so that gives them two more months to sort it out”, says the source.
Firms submitted a second set of commercial bids on 4 July, after Echem finalised the technical details of the project with the bidding firms. Technical bids were submitted at the end of February and initial commercial bids in later March (MEED 9:7:10).
Securing the financing for the project is likely to delay the project further, says a Dubai-based industry expert.
“You need to question where the financing is really going to come from, particularly if the shareholders are all government entities. The country is broke and that is why they are doing IPP [independent power plant] projects to get in private money,” says the source.
The new plant will crack ethane, a component of natural gas, breaking it down into ethylene, the most basic building block of the petrochemical industry. It will produce between 750,000 and 1 million tonnes a year (t/y) of ethylene, which will then be used to produce polyethylene, a basic plastic.
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.
The development is part of a 20-year masterplan unveiled in 2002 to develop Egypt’s petrochemicals industry, which will involve investments of $10-20bn.