Samsung signs NPPC deal

21 October 2005
South Korea's Samsung EngineeringCompany signed on 4 October the long-awaited engineering, procurement and construction (EPC) contract to build the National Polypropylene Company (NPPC)integrated propane dehydrogenation (PDH)/polypropylene (PP) facility at Jubail. The contract announcement follows the provisional selection of Samsung last year (MEED 20:8:04).

The scope of works for the estimated $500 million EPC contract covers the construction of a 450,000-tonne-a-year dual PDH/PP plant. Detailed engineering is already under way on the scheme, with work on the construction portion due to start soon. The plant is scheduled to be commissioned by the first quarter of 2008.

The project company is Advanced Polypropylene Company (APPC), whose main shareholders are NPPC, the local Dar Chemicals, the Islamic Development Bank (IDB), US-based ABB Lummus Global, the US' VinmarGroupand Al-Rashid Groupand Al-Rajhi Group, both local.

ABB Lummus has the project management consultancy (PMC) contract on the project and has licensing agreements for the plant's technology. Propane feedstock for the facility will be provided by Saudi Aramco. Long-term offtake agreements have been secured with Vinmar and Japan's Mitsubishi Chemical Corporationfor the plant's PP output.

Banks are still waiting for the invitations to participate in the debt package. The financing facility is expected to be worth about $400 million, with the Saudi Industrial Development Fund contributing additional funding. Gulf International Bankis acting as financial adviser (MEED 2:9:05).

www.meed.com/petrochemicals

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