Offtakers sign up for BDO output

04 July 2003
Saudi International Petrochemical Company (Sipchem)affiliate Gulf Advanced Chemical Industries Company (GACIC)has signed two offtake agreements with international companies for the bulk of its butanediol (BDO) output from its Jubail plant. A third offtake agreement has still to be signed. GACIC is the company in charge of developing Sipchem's BDO complex, which is due to come on stream in 2005 with capacity of 75,000 tonnes a year (t/y).

Under the agreements, signed on 30 June, the US' Vinmar Internationalwill market 45,000 t/y of GACIC's BDO production, while Netherlands-based Will & Companyhas agreed to market another 15,000 t/y. A source close to the project says that negotiations have reached an advanced stage for a third offtake agreement, covering the remaining output of 15,000 t/y.

Sipchem is also pressing ahead with efforts to raise financing for the project. The company has already secured SR 380 million ($103 million) in funding from the Saudi Industrial Development Fund (SIDF) and plans to raise $80 million-100 million of additional funding, possibly by the end of the year.

Kvaerner E&C, part of the Oslo-based Aker Kvaernergroup, has the engineering, procurement and construction (EPC) contract for the BDO facility. The company has already started engineering on the scheme, with construction due to kick off by the end of this year. Feedstock for the BDO plant will come from a maleic anhydride (MAN) unit, which will also be built under the EPC contract (MEED 2:5:03).

Netherlands-based Huntsman Investmentsand London-based Davy Process Technologywill provide the technology for the plant. The project manager for the whole complex is the US' Fluor Daniel.

GACIC is a 60/40 joint venture between Sipchem and four private-sector partners - Abdullatif Saud al-Babtain & Brothersand Sabih al-Masri, both local, Huntsman and Davy (Petrochemicals, MEED Special Report, 11:4:03, pages 25-26).

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