Sabic and ExxonMobil yet to decide strategy for $2bn elastomers complex

18 July 2011

US chemical giant’s concerns over intellectual property rights are stalling decision

Saudi Basic Industries Corporation (Sabic) and the US’ ExxonMobil Chemical are still undecided about which strategy to pursue with regards to their $2bn elastomers joint venture in Saudi Arabia.

Problems surfaced after ExxonMobil Chemical voiced concerns about intellectual property rights it holds on the technology being used at the halobutyls rubber plant package at the proposed plant.

“[ExxonMobil Chemical] is worried that the contractor that wins the package could have access to the technology,” a source familiar with the project says. “To try and counter this, they want to ensure that a trusted contractor is [appointed] in a PMC [project management consultant] capacity.”

One solution could be that the US’ Jacobs Engineering, which is carrying out the front-end engineering and design (feed) for the package, extends its contract and carries out the detailed engineering, while another contractor carries out the construction.

However, no decision regarding this has been made by either Sabic or ExxonMobil Chemical.

As well as the halobutyls rubber plant, the other two packages at the plant are for ethylene propylene diene monomer (EPDM)/polybutadiene rubber (PBR) facilities and the offsites and utilities (MEED 20:5:11).

The companies prequalified to bid for the engineering, procurement and construction (EPC) contract for the two technical packages include:

  • CTCI Corporation (Taiwan)
  • Daelim Industrial Company (South Korea)
  • GS Engineering & Construction Corporation (South Korea)
  • Hyundai Engineering & Construction (South Korea)
  • Samsung Engineering (South Korea)
  • Technip (France)

When completed, the elastomer project will produce about 400,000 tonnes a year (t/y) of carbon black, rubber and thermoplastic speciality polymers. The plant will use ExxonMobil technology and the products will be sold on local and international markets.

Carbon black is derived from heavy petroleum products and is mostly used by the automotive industry to add strength to plastic and rubber products used in car production.

The scheme will be built at the Al-Jubail Petrochemical Company (Kemya) complex in the Eastern Province.

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