The Sadara Chemical Company has awarded the US’ Jacobs Engineering the engineering, procurement, construction and management (EPCM) contract for the chlorine plant at its $20bn petrochemicals joint venture in Saudi Arabia.
The deal was awarded to Jacobs by the joint venture partners behind the scheme, Saudi Aramco and the US’ Dow Chemical, after the company carried out the front-end engineering and design (feed) for the package.
“Lump-sum turnkey (LSTK) is the usual contract, but sometimes a package can be a little bit tricky to execute in that way,” says a contracting source based in the Eastern province. “Jacobs have been asked to roll over their feed onto EPCM, which is not surprising because the chlorine plant has some intricate aspects that suit that model.”
Contracts for the Sadara project are mostly being awarded on a LSTK basis, but there are exceptions for the more complicated packages.
In July, Sadara awarded the US Fluor an EPCM contract for the utilities and offsites package due to the complicated nature of the work (MEED 22:8:11).
“Fluor won that after a bidding round, but Jacobs have just rolled over onto this one after a direct negotiation,” the source says. “While direct negotiations guarantee you the work, it also means that [Sadara] probably got a good price from Jacobs.”
After a series of contract awards in June and July, the Sadara project is now tendering more packages. Bid submissions for a number of packages, including the $400m main tank farm are expected in October (22:9:11).
Sadara Chemical Company is the new name for the joint venture between Aramco and Dow. The complex will have a capacity of about 8 million tonnes a year (t/y) and will be constructed at Jubail Industrial City 2 in the Eastern Province of the kingdom.
The complex will produce a number of speciality chemicals aimed at pushing Saudi Arabia’s petrochemicals industry further downstream.