Sabic approves $6bn expansion programme

25 June 2004
The board of Saudi Basic Industries Corporation (Sabic)has approved a SR 24,000 million ($6,400 million) expansion programme, involving the addition of 8.4 million tonnes a year (t/y) of new petrochemical and steel capacity in Jubail and Yanbu by 2008. The programme covers the grassroots olefins complex at Yanbu, for which a project manager has now been appointed, and the expansion of capacity at existing Jubail-based affiliates Eastern Petrochemical Company (Sharq), Saudi Methanol Company (Ar-Razi) and Saudi Iron & Steel Company (Hadeed).

UK-based Foster Wheeler Energyhas been appointed the project manager on the Yanbu scheme, a scaled-up version of Sabic's Jubail United Petrochemical Company (United)complex.

Other bidders for the contract, which includes front-end engineering and design (FEED) work, were ABB Lummus Global, Bechtel, Fluor Daniel, Jacobs Engineeringand Parsons Corporation, all US-based, and the UK's AMEC.

Five companies - ABB, Shaw International(formerly known as Stone & Webster) and Kellogg Brown & Root, all US-based, Germany's Lindeand Paris-based Technip - responded in early June to the preliminary inquiry for the ethylene package on the scheme. The technology supply and engineering, procurement and construction (EPC) contract for the cracker is expected to be tendered later this year. The complex will comprise a mixed feedstock cracker with capacity of 1.3 million t/y, an 800,000-t/y polyethylene (PE) unit and a 700,000-t/y ethylene glycol (EG) facility as well as a 350,000-t/y polypropylene unit.

At Sharq, Sabic has given the go-ahead for a $2,300 million expansion covering the construction of a 1.5 million-t/y cracker, a 600,000-t/y EG plant and an 800,000-t/y PE unit. Project completion is scheduled for 2008. Sharq, a 50:50 joint venture between Sabic and a group of Japanese companies led by Mitsubishi Corporation, is finalising an in-house pre-feasibility study and is in the process of appointing a project manager (MEED 9:1:04).

On the Ar-Razi project, which calls for the addition of a fifth, 1.7 million-t/y methanol unit by 2007, the release of tender documents is imminent for the EPC contract. Ar-Razi is a 50:50 joint venture between Sabic and a consortium of Japanese companies led by Mitsubishi Gas Chemical Company (MGCC - MEED 11:6:04).

The final element in Sabic's expansion programme covers the construction of a 1 million-t/y flat products plant in 2006 at its subsidiary Hadeed. Two companies - Austria's Voest Alpine Industrieanlagenbau (VAI) and Italy's Danieli & Company- are competing for the contract, which is expected to be awarded in September.

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