US Jacobs awarded EPCM contract for Saudi Arabia Sadara project

08 November 2011 15:51  [Source: ICIS news]

LONDON (ICIS)--Jacobs has been awarded an engineering, procurement and construction management (EPCM) contract package by Sadara Chemical for work on a world-scale project at Jubail Industrial City in Saudi Arabia , it said on Tuesday.

Officials at the US-based petrochemicals engineering company did not disclose the financial terms of the agreement.

Sadara Chemical is a newly formed 50:50 joint venture between US-based Dow Chemical and Saudi Arabia-based Saudi Aramco.

Under the terms of the contact, Jacobs will provide front-end engineering design (FEED) and detailed engineering services, in addition to procurement, inspection and delivery of equipment and bulk materials, as well as the overall construction management, "for the Chemicals 1 Envelope of Sadara Chemical," it said.

"We are delighted to be a part of the Sadara project, which strategically brings together the resources of Saudi Aramco and the technologies of Dow," said Jacobs vice president Bob Irvin.

Top executives of Dow Chemical and Saudi Aramco in October 2011 signed a shareholder agreement for the $20bn (€15bn) Sadara joint venture.

The project will be one of the world’s largest integrated chemical facilities and one of the largest built in a single phase, with 26 manufacturing units.

Saudi Aramco and Dow had announced their respective board authorisations to form Sadara on 25 July, following a project feasibility study and front-end engineering and design (FEED) effort, which began in 2007.

The complex is expected to produce $10bn/year in revenue, with the first production units forecast to come on line in the second half of 2015.

It will produce products such as polyurethanes (isocyanates, polyether polyols), propylene oxide (PO), propylene glycol (PG), elastomers, linear low density polyethylene (LLDPE), low density polyethylene (LDPE), glycol ethers and amines.

In a recent monthly bulletin, OPEC said that Saudi Aramco CEO Khalid Al-Falih stated that a good contracting market should keep capital costs for Sadara under $20bn. Sadara would use ethane as feedstock for around one-third of its chemicals output, he added.

South Korean firms have already signed up for three of the project’s 12–14 EPCM packages. More will be put out to tender soon, with awards set to be made in the second quarter of next year, OPEC said.

($1 = €0.73)

For more on Dow Chemical and Saudi Aramco visit ICIS company intelligence

By: Franco Capaldo
+44 (0)20 8652 3214

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