The local Sadara Chemical Company is set to award the US’ Jacobs Engineering the contract to manage the construction of a polyethylene plant at its planned $20bn complex at Jubail in the Eastern Province.

The package was awarded to Jacobs on a construction management basis due to complex issues regarding the engineering and procurement of the technology, which is owned by the US’ Dow Chemical. Dow Chemical owns a 50 per cent share of Sadara with Saudi Aramco owning the other 50 per cent.

“The [polyethylene] unit is an interesting package because it is using Dow’s own technology,” says a source familiar with the contract. “This means that Dow will handle the vast amount of the engineering work, as well as carry out the procurement on the majority of the high-value items required for the job. It has no construction arm though, so it is giving that job to Jacobs.”

MEED reported in December that Sadara was evaluating the bids for the plant, which is estimated to cost $1.3bn to build. Sources in the kingdom indicate that the contract should be worth about 800,000-900,000 man hours to Jacobs.

Jacobs Engineering and Dow Chemical were unavailable for comment when contacted by MEED.   

The Sadara project has been awarding contracts for various packages over the past six months, but due to the many technical challenge, a number of different contracting strategies are being used.

South Korea’s Daelim Industrial and Daewoo Engineering & Construction have secured contracts at Sadara on a lump-sum turnkey (LSTK) basis, but the US’ Fluor is executing the utilities and offsites package on an engineering, procurement, construction and management (EPCM) basis.

“Such a huge project makes LSTK basically impossible for a vast majority of the work,” says the contracting source. “This is good news for the engineering consultancies as LSTK is more tailored to EPC contractors.”

Sadara Chemical Company will have a capacity of about 8 million tonnes a year (t/y) and will be constructed at Jubail Industrial City 2 in the Eastern Province of the kingdom.

The complex will produce several speciality chemicals aimed at pushing Saudi Arabia’s petrochemicals industry further downstream.