SABIC-Mitsubishi JV inks $1.2bn Saudi MMA, PMMA plant contract

26 June 2014 16:27 Source:ICIS News

SABIC building (source: SABIC)LONDON (ICIS)--A joint venture between SABIC and Japan-based Mitsubishi  Rayon has signed a contract to develop a methyl methacrylate monomer (MMA) and a polymethyl methacrylate (PMMA) plants in the Kingdom, the Saudi Arabia-headquartered company said on Thursday.

To be based in Jubail Industrial City, the MMA and PMMA plants will have projected capacities of 250,000 tonnes/year and 40,000 tonnes/year respectively, at an estimated cost of Saudi riyals (SR)4.5bn ($1.2bn).

Construction has begun and the plants are expected to be completed by the first quarter of 2017 and begin commercial operations later that year. The projects will be funded with a mix of cash and bank finance.

Taiwan-based engineering firm CTCI Corporation has been awarded an engineering, procurement and construction (EPC) contract to work on the construction of both plants, the companies added.  Other companies understood to have bid on the engineering tender include South Korea’s Daelim Industrial, France’s Technip and Spain’s Tecnicas Reunidas.

SABIC and Mitsubishi Rayon first agreed to develop the plants in May 2011, with the project initially expected to be completed by the end of 2014. According to SABIC, laying the groundwork for the project had taken longer than expected.

"The process of preparing the fundamental engineering designs and concluding the procurement agreements took longer than scheduled. The aim was to complete the feasibility studies and conclude some relevant agreements. During this period, there was no significant financial impact," SABIC said in a filing on Saudi bourse Tadawul.

($1 = SR3.75)

By Tom Brown