In the first half of 2012, Saudi Arabia’s petrochemicals sector has been active with several high-value contract awards that have underlined the kingdom’s spending commitments to its most vital non-oil sector.

Capital expenditure figures for the kingdom’s downstream oil and petrochemicals industries over the past four quarters make for impressive reading. More than $18bn-worth of work has been given to international and local contractors.

Middle East projects tracker MEED Projects states that contract awards totalled $8.9bn in the first half of 2012. The figure represents a 7 per cent decrease on the second half of 2011, when $9.5bn-worth of contracts were awarded, but is more than 88 per cent higher than the first half of 2011, when only $1.03bn of awards were made.  

The past six months have been dominated by several petrochemicals megaprojects planned by Riyadh with an aim to create a diverse industrial base.

The largest project by size is the $20bn Sadara Chemical Company complex being built by Saudi Aramco and the US’ Dow Chemical at Jubail in the Eastern Province. The joint venture made five awards totalling $1.61bn in the first half of 2012. The scheme has been making awards for more than 12 months, but there are still several technical packages and sub-contracts still to be won.  

The PetroRabigh phase 2 expansion had been delayed for several months during the tender evaluation stage. The project owners, Saudi Aramco and Japan’s Sumitomo Chemical, made the contract awards in May and June of 2012, after they had resolved a few issues, including changes to the scope.

MEED Projects states that a total of $3.4bn-worth of work was awarded to contractors by PetroRabigh. The winning bidders included South Korea’s GS Engineering & Construction, which picked up four packages, and Daelim Industrial, also of South Korea, as well as the UK’s Petrofac and Japan’s JGC Corporation.

Saudi Basic Industries Corporation (Sabic) has also had a busy first half of the year and most of the remaining contracts, totalling more than $4.1bn, were awarded by the company or by one of its subsidiaries. 

The main scheme for Sabic in 2012 has been its $3.4bn elastomers joint venture with the US’ ExxonMobil, which announced its main contract awards in late June. Daelim Industrial was awarded three packages, with Spain’s Tecnicas Reunidas winning two and France’s Technip picking up one.