Two firms compete for retendered Saudi Kayan plastics deal

17 November 2009

Petrochemicals firm asks China Technical Consultants and Daelim to revise prices

Only two international engineering firms remain in the running for a retendered $300m contract to build a new plastics plant in Saudi Arabia for petrochemicals maker Saudi Kayan.

The petrochemicals firm has asked Taiwanese firm China Technical Consultants Incorporated and South Korea’s Daelim Corporation to submit revised prices for the deal by the end of December.

The firms submitted commercial bids outlining cost structures for their proposals, in September as did South Korea’s Samsung Engineering. However, Samsung then withdrew.

“After discussions with their shareholders, the client decided they would go into direct negotiations to get a better deal,” says a senior executive close to the bidding process. “They want to get the best price possible.”

The winning bidder will build a 300,000-tonne-a-year (t/y) low density polyethylene (LDPE) plant at Saudi Kayan’s existing petrochemicals complex at Jubail on the kingdom’s east coast.

The UK’s Simon Carves won a deal to build the plant in March 2007. It has completed engineering design work and most of the procurement on the scheme, according to a senior source close to the scheme.

Saudi Kayan retendered the scheme in the first quarter of 2009 after a dispute with Simon Carves.

The petrochemicals company originally wanted to finish the plant by the end of 2010, but it will have to delay the opening date until as late as the second quarter of 2012, according to firms with knowledge of the scheme.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications