Technical bids in for Borouge plastics expansion deal

02 March 2010

Italian/South Korean consortium looks to consolidate three major construction deals

At least four international engineering firms have submitted technical bids to Abu Dhabi Polymers Company (Borouge) for an estimated $500m deal to build a plastics conversion plant at the company’s Ruwais petrochemicals complex.

Germany’s Uhde, Italy’s Tecnimont, Taiwan’s China Technical Consultants Incorporated (CTCI) and South Korea’s Daelim are all understood to have submitted bids for the deal in time for the 28 February deadline.

The engineering, procurement and construction (EPC) deal covers a specialised plant that will convert the basic plastic polyethylene produced at the first unit into low-density polyethylene (LDPE), a plastic used to make piping.

Borouge licensed the technology for the LDPE plant from the US’ Lyondell Basell. Contractors originally thought that US company had only approved Uhde, Tecnimont and the UK’s Simon Carves to build plants using its technology.

The deal is part of Borouge’s plans for a third-phase expansion of its Ruwais facilities, called Borouge 3. Once the scheme is complete in early 2014, the company will produce 4.5 million tonnes a year (t/y) at the complex.

In July 2009, the company awarded a $1.07bn deal to Germany’s Linde to build a 1.5-million-t/y cracker unit to break down ethane, a component of natural gas, into ethylene and propylene. Once completed, the cracker will be one of the biggest of its kind in the world.

Technical bids for the main polyolefins plant, which will convert ethylene and propylene into the plastics polyethylene and polypropylene, went in on 14 February, while engineering proposals for the offsites and utilities package are due in on 15 March (MEED 15:2:2010).

Sources close to the project say Tecnimont and South Korea’s Samsung Engineering, which it is partnering to bid on all of the remaining deals, are in talks with Borouge to take on all three projects. They plan to submit technical and commercial proposals for each individual EPC package alongside an overarching bid for the complete project.

“They are really keen to wrap this project up,” says the business development manager at a rival bidder. “But I am not sure if Borouge will want just one contractor working on all three projects.”

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