KBR, Fluor win first Saudi Kayan contracts

30 June 2006
The giant Saudi Kayan Petrochemical Company Jubail complex got off the starting blocks in late June, with letters of intent (LoIs) signed for the first two main packages on its grassroots petrochemical project. The cracker contract went to the US' Kellogg Brown & Root (KBR), while the US' Fluor Corporation took the offsites and utilities (O&U) package (MEED 21:5:06).

KBR received on 27 June the LoI to build the 1.35 million-tonne-a-year (t/y) ethane/butane cracker, beating off competition from Stone & Webster, part of the US' Shaw Group. Under the terms of the deal, worth an estimated $1,200 million, the 40-month contract will be implemented on an engineering, procurement and construction management lump-sum basis, with options to convert to lump-sum engineering, procurement and construction (EPC) within one year. KBR will employ its proprietary Score technology on the cracker.

A day earlier, Fluor was issued the LoI for the O&U package. Worth an estimated $500 million-600 million, the work involves large-scale infrastructure work including piping, roads, housing, utilities and fencing. Fluor, which is also the overall project management consultant (PMC) on the complex, won the contract after direct negotiations with Saudi Kayan. Contract signings on both packages are expected by the end of August (MEED 26:5:06).

Comprising 13 separate downstream units, and with an estimated development cost of $8,000 million, Saudi Kayan is set to be the largest stand-alone petrochemicals complex ever built.

The project gained momentum when Saudi Basic Industries Corporation (Sabic) agreed to take a 35 per cent stake in Saudi Kayan earlier in the year. Three international contractors are preparing to bid by early August for the 1 million-t/y ethylene oxide/ethylene glycol (EO/EG) package, while tenders for the remaining downstream units are expected to be issued over the next 12 months (MEED 9:6:06).


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