Tasnee complex postponed

10 March 2006
The estimated $1,500 million Jubail acetyls complex planned by the US/local joint venture of Celanese and Tasnee Petrochemicals has been postponed by at least a year because of concerns over rising construction costs. 'Celanese did not think it was the right time to proceed,' says a source close to the project. 'There are too many projects at the moment in the kingdom and EPC [engineering, procurement and construction] costs are too high.'

The proposed project comprises a 1.8 million-tonne-a-year (t/y) methanol plant and two 500,000-t/y acetic acid and 275,000-t/y vinyl acetate monomer (VAM) units. Germany's Lurgi was late last year awarded the early works package on the methanol plant, but this order has now been put on hold. 'It can be reactivated once the project gets the go-ahead next year, or if a new partner is found before then,' says the source (MEED 9:12:05).

The project is the latest casualty of rising EPC costs across the region. The 1 million-t/y styrene plant planned by Saudi Petrochemical Company (Sadaf) was postponed last year after EPC bids came in considerably above budget, while other planned petrochemical schemes in the kingdom have been affected by a shortage of gas feedstock (MEED 27:5:05).

Speaking to MEED in early March at the launch of the Gulf Petrochemicals & Chemicals Association (GPCA), Saudi Basic Industries Corporation (Sabic) vice-chairman and chief executive officer Mohammed al-Mady said that EPC costs were a major concern for petrochemical producers. 'It is a big issue as prices have increase dramatically,' he said. 'Those companies which are strong can deal with it, but weaker ones may miss out, and I think many plans will be delayed or scrapped because of this' (MEED 3:3:06).

Tasnee's Jubail olefins complex, which it is developing alone, is still on track however. Italy's Tecnimont is working on the two 450,000-t/y high-density and low-density polyethylene (HDPE/LDPE) plants, while the German/South Korean consortium of Linde and Samsung Engineering Company is building the 1.2 million-t/y ethane/propane cracker (MEED 11:11:05).

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