Samsung Engineering closes in on $1bn Saudi deal

14 September 2007 10:57  [Source: ICIS news]

SINGAPORE (ICIS news)--South Korea’s Samsung Engineering plans to close a $1bn engineering, procurement and construction (EPC) deal by the end of the year in Saudi Arabia to meet its revenue goal for 2007, a company spokesman said on Friday.

 

PetroRabigh, a refinery-petrochemical joint venture of Sumitomo Chemical and Saudi Aramco and a cracker joint venture of Saudi Industrial Investment Group (SIIG) and a wholly owned affiliate of Chevron Phillips Chemical were expected to award Samsung contracts by the end of this year.

 

“We have several [EPC] proposals worldwide including Saudi Arabia. We hope to get the good news from the Middle East within this year,” Hong Sung-il, head of the company’s investor relations team, said.

 

The company has already won contracts for nine gas, oil and petrochemical projects worth won (W) 3,100bn ($3.3bn) so far this year, bringing its total overall revenue to W3,800bn - the other W700bn coming from industrial, environment and infrastructure projects. The latest contract in July was to build a gas separation plant for PTT in Thailand.

 

Bidding for several more projects in the Gulf Cooperation Council (GCC) region, including Hanwha Chemical’s joint venture with Saudi International Petrochemical Co (Sipchem) and Honam Petrochemical’s project with Qatar Petroleum, could start next year.

 

Samsung Engineering could expand its engineering capability in the GCC and win deals in countries other than Saudi Arabia, Hong said, adding that it planned to increase its manpower by 30% each year until 2008.

 

It has bagged a contract from Borouge to work on an olefins conversion unit, its first in the United Arab Emirates (UAE).

 

The Latin America region, where the company has strong relations with Mexican petrochemical producer Petroleos Mexicanos (Pemex), was also another potential growth area, Hong said.

 

The company also planned to diversify its products by developing its liquefied natural gas (LNG) capability, Hong said.

 

It could form an alliance with a basic engineering company, he added but declined to name the firm.

 

($1 = W933.44)

By: Florence Tan
+65 6780 4359

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