Korean firms compete to build $400m plant in Jubail

18 September 2009

Four South Korean contractors have submitted bids for a $400m petrochemicals project at Jubail in Saudi Arabia more than a year after the Saudi authorities cancelled the original tender because they thought prices were too high.

Daelim, GS Engineering & Construction, Hyundai Engineering & Construction and Samsung Engineering all submitted bids for the deal on 22 August, and expect an award in early October.

The client on the engineering, procurement and construction (EPC) deal is Arabian Chlor Vinyl Company, a 50:50 joint venture of Saudi Arabian Mining Company (Maaden) and Sahara Petrochemical Company, which are both based in the kingdom.

The winning contractor will build a 300,000-tonne-a-year (t/y) ethylene dichloride plant and a 250,000-t/y caustic soda plant.

Ethylene dichloride is a key component in the manufacture of vinyl chloride, which is used to make the plastic polyvinyl chloride. Caustic soda is an industrial cleaner that is widely used in paper production.

The same four firms originally submitted bids for the deal in April 2008, but Arabian Chlor cancelled the tender and changed the scope of the project after the prices came in well over the client’s budget.

Arabian Chlor retendered the project in August 2008 but did not award it as the joint venture partners believed the prices, at more than $400m, were too high.

Executives bidding on the project do not expect a repeat of what happened in 2008 because the cost of materials has fallen significantly since the bid round.

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