PMD meets ethylene club, JV partner emerges

19 November 2004
Another major cracker project is on track to go to tender with the anticipated first-quarter release of invitation to bid (ITB) documents by the local Project Management & Development Company (PMD). All five members of the ethylene club attended a pre-bid meeting arranged by PMD in early November in London. The development comes amid reports that Houston-based Westlake Chemical Corporationis in advanced negotiations with PMD in becoming a joint venture partner on the estimated $2,500 million petrochemicals complex at Jubail (MEED 5:11:04).

PMD will tender the planned 1.4 million-tonne-a-year (t/y) ethane/butane cracker on an engineering, procurement and construction (EPC)-plus-technology basis. The five members of the ethylene club are ABB Lummus Global, Shaw Internationaland Kellogg Brown & Root, all US-based, Germany's Lindeand Paris-based Technip. It is not yet clear whether all five technology providers will bid for the project.

The appointment of an international partner on PMD's Jubail project is considered essential in order to secure funding from local and international banks.

A joint venture partner is expected to take a major equity stake in the planned project firm - to be named Kayan Petrochemical Company- and act as offtaker for the bulk of the product. The partner will also assist in operation and maintenance.

US-based Fluor Danielis the project management services (PMS) contractor. Arab Banking Corporation (ABC)is the financial adviser and is working with PMD on raising $850 million in equity from local and GCC institutional investors by the end of December. The preliminary information memorandum (PIM) for the project's debt is expected to be released in the first quarter. Financial close is scheduled for the end of 2005.

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