PMD, which has Arab Banking Corporation (ABC)as its financial adviser, is also pressing ahead with raising $850 million of equity in a private placement (MEED 27:8:04).

Fluor Daniel won the PMC contract against competition from at least three other US-based companies - Foster Wheeler, which until recently acted as PMD's technical adviser, Jacobs Engineeringand Parsons Corporation.

The project's first engineering, procurement and construction (EPC) package, covering the construction of a 1.4 million-tonne-a-year (t/y) ethane/butane cracker and the supply of technology, is now set to go for bid in the first quarter of 2005. EPC packages for downstream units are due to be tendered in the second or third quarter. Project sources say feedstock supply from Saudi Aramcois in place and that inputs of 30-50 million cubic feet a day of ethane and 65,000-95,000 barrels a day of butane are guaranteed.

PMD and ABC are targeting local and GCC institutional investors to take equity stakes in the closed joint stock project company by the end of December, when the subscription period will end. Sources say Saudi British Bankwill act as the local escrow agent on the offering.

PMD is also holding final negotiations with three potential joint venture partners, with the selection of one company planned for November. The joint venture partner is expected to take a major equity stake in the project firm and act as offtaker for the bulk of the product and assist in operation and maintenance.

The schedule for the fast-tracked project sees a preliminary information memorandum (PIM) for the debt being issued towards the end of the second quarter 2005 and financial close achieved by the end of the year. It is expected that a multi-tranche package, including commercial debt, export credits and Islamic structures. will be deployed.

The project's downstream units include a 970,000-t/y polyethylene plant, a polypropylene plant with capacity of at least 500,000 t/y and a 530,000-t/y ethylene oxide unit for the production of ethylene glycol, ethanolamine, methylamine and derivatives and ethoxylates. The PMD complex is due to come on stream in 2008.

Ernst & Young, which was appointed as economic consultant by PMD last year, has completed a prefeasibility study on the project. PMD's legal adviser, Clifford Chance, is working on the project's ownership structure. US-based CMAIhas drawn up a marketing strategy and will continue working with PMD.

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