Kvaerner closes in on BDO

14 March 2003
The Norwegian Kvaerner E&Cis in advanced talks with Saudi International Petrochemical Company (SIPC)for the contract to build a butanediol (BDO) plant at SIPC's proposed complex in Jubail. A final agreement for the engineering, procurement and construction (EPC) project is expected to be signed within weeks (MEED 3:1:03).

SIPC says talks are also on track to conclude offtake agreements by the end of March for the plant's BDO output, all of which is earmarked for export. The facility will produce 75,000 tonnes a year (t/y) of BDO, up from SIPC's original production target of 50,000 t/y, and some 5,000 t/y each of two BDO derivatives, tetrahydrofuran (TPA) and gamma-butyrolactone (GBL). The plant's maleic anydride (MAN) production will serve as feedstock for the BDO unit.

London-based Davy Process Technology will provide the technology for the plant, which is scheduled to come on stream in 2005.

SIPC has already secured SR 400 million ($107 million) - 40-50 per cent of total project costs - from the Saudi Industrial Development Fund (SIDF) towards financing the project, with the remainder to be provided from commercial loans. All financial arrangements are expected to be concluded in the fourth quarter.

The EPC contract will be the second SIPC complex award, following last year's appointment of Japan's Chiyoda Corporationas the EPC contractor on the estimated SR 938 million ($250 million) project to build a 970,000-t/y methanol plant and associated utilities (MEED 9:8:02).

Studies are still ongoing for the installation of two other plants at the SIPC complex for the production of 275,000 t/y of acetic acid and 250,000 t/y of vinyl acetate monomer (VAM). Plans for a large-scale ethane cracker at the site have been put on the backburner. Under a long-term expansion plan for the Jubail complex, SIPC plans to produce up to 4 million t/y of petrochemical products by 2010.

The project manager for the whole complex is the US' Fluor Daniel.

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