The MoU covers two main elements - the addition of new olefins capacity at the existing Equate Petrochemical Company complex and the construction of a 500,000-tonne-a-year (t/y) styrene plant, to serve as part of a proposed new aromatics complex.

PIC had originally planned the construction of a $2,000 million greenfield olefins plant with capacity of 850,000 t/y of ethylene, 450,000 t/y of polypropylene and 430,000 t/y of ethylene glycol. However, the plan was subsequently changed, on account of the huge capital costs associated with the greenfield development, in favour of an expansion of the existing Equate complex. It is expected to involve the doubling in capacity of the Equate plant, which currently stands at 800,000 t/y of ethylene, 600,000 t/y of polyethylene and 400,000 t/y of ethylene glycol.

PIC and Dow each have a 45 per cent stake in Equate, with the remaining 10 per cent held by the local Bubiyan Petrochemical Company.

In addition to the styrene unit, the estimated $1,400 million aromatics complex will include 650,000 t/y each of benzene and paraxylene. The US' Bechtel has been selected as project management consultant (PMC) for the complex. Two other firms - AMEC of the UK and Fluor Daniel, also of the US - were competing for the post of PMC.

Both projects are targeted to be commissioned in 2005/6. International law firm Ashurst Morris Crisp is acting as legal adviser to PIC for the proposed projects.