The first of the two PE packages, which together are estimated to be worth more than $1,400 million, covers the construction of the linear low-density polyethylene (LLDPE) and easy processing polyethylene (EPPE) units, each with capacity of 300,000 tonnes a year (t/y), and two 350,000-t/y polypropylene (PP) units. Sumitomo Chemical’s own proprietary technology will be licensed for the units.
The second package involves the construction of a 300,000-t/y high-density polyethylene (HDPE) unit utilising technology licensed from Europe’s Basell
. Execution of both packages is expected to take at least two years.
Japan’s Mitsui Engineering & Shipbuilding Company (MESC)
and Spain’s Tecnicas Reunidas
, both in joint ventures with Sumitomo Corporation, are both understood to be in contention for the third package, which calls for the construction of the 600,000-t/y MEG unit train and the 200,000-t/y PO unit.
In an attempt to control escalating costs and reduce risk for contractors, which are faced with uncertainty over material and equipment prices as well as subcontractor shortages, Petro-Rabigh will initially sign the contracts on a cost reimbursable basis. They will be converted to lump-sum turnkey (LSTK) once most of the detailed engineering and procurement of some long-lead items is completed.
UK-based Foster Wheeler Energy
, with its local partner Sofcon
, is the overall project management services (PMS) contractor on the Rabigh programme. Sumitomo-Mitsui Banking Corporation (SMBC)
is acting as financial adviser (MEED 15:7:05, Cover Story).