Bahrain’s Kanoo Group is in talks with the US’ Jacobs Engineering regarding the project management consultancy (PMC) and front-end engineering and design (feed) contract for its $1bn Dammam 7 petrochemicals project in Saudi Arabia.
Basic engineering work has started at the Jubail acrylic acid and acrylates complex and negotiations with Jacobs are now well under way.
“Kanoo has been moving this project forward after delaying it due to a number of issues,” says a source familiar with the project. “Now they are in talks with Jacobs for both the PMC and the feed, which means they must be feeling confident about getting the funding in place.”
In regards to the engineering, procurement and construction (EPC) contract, the fact Kanoo is in talks with Jacobs makes it likely the US contractor will be responsible for awarding the contract as part of its PMC duties.
The Dammam 7 project has been in the planning stage for about two years as Kanoo Group looked to secure feedstock and power from the Saudi Arabian government, as well as financing.
In 2010, the company decided to double the scope of the plant to ensure that the plant made sense in regards to economies of scale. The capacity of the planned plant is now 200,000 tonnes a year (t/y) of butanol and 400,000-t/y of acrylic acid, which will make it one of the largest plants of its type in the world (MEED 1:10:11).
Saudi Aramco will be providing gas, with the local/French joint venture Saudi Aramco Total Refining & Petrochemical Company (Satorp) providing the main propylene feedstock. Power will be provided by Power and Water Utility Company for Yanbu and Jubail (Marafiq).
The financing of the project is expected to come from a number of sources, including the Saudi Industrial Development Fund. About $670m expected to come from export credit agencies and commercial banks.
Kanoo was not available for comment when contacted by MEED. The completion of Dammam 7 is expected to be late 2013 or early 2014.