Sabic exits Osos Yanbu negotiations

11 April 2008
Saudi Basic Industries Corporation (Sabic) is understood to have pulled out of talks to take a stake in the estimated $1bn polybutylene terephthalate (PBT) complex in Yanbu, planned by the local Osos Petrochemicals.

MEED revealed in January that Sabic was looking to become a partner in the project (MEED 15:1:08). This was subsequently confirmed by Sabic when it announced later that month it was signing a memorandum of understanding with Osos to take a 35 per cent stake in the joint venture.

At the time, Sabic said it would review the project’s economic feasibility study and reach a final decision on its involvement within two months.

It is unclear why negotiations have broken down, but it is thought that the offtake cost of the PBT was the main factor.

Osos is now understood to be looking for another partner, primarily to provide technology.

Bids are under evaluation for the main engineering, procurement and construction contract to build the main process units at the complex, which will produce 60,000 tonnes a year (t/y) of PBT, 50,000 t/y of butanediol, 3,500 t/y of tetrahydrofuran, and 85,000 t/y of maleic anhydride acid. Most of the technology has been supplied by Japan’s Hitachi.

Four groups are bidding for the estimated $500m contract. They are Oslo-based Aker Kvaerner with China’s Sinopec, and South Korea’s GS Engineering & Construction, Samsung Engineering Company and Hanwha Engineering & Construction.

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