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Local firm wins Saudi petrochemical pipeline contract

14 March 2023

Advanced Petrochemical Company (Advanced) has awarded local contractor Gas Arabian Services a contract, valued at $13.57m, to build a feedstock pipeline for its upcoming petrochemicals facility in Saudi Arabia’s Jubail Second Industrial City (Jubail 2).

Advanced and South Korea’s SK Gas Company formed a joint venture (JV), Advanced Polyolefins Company, to develop and operate the petrochemicals facility in Jubail.  Advanced owns the majority 85 per cent stake in the JV, with SK Gas holding the remaining 15 per cent.

Gas Arabian Services will perform engineering, procurement and construction (EPC) works to build the pipeline that would supply a stream of gaseous by-product, containing high-value chemicals, from the petrochemicals facility to Jubail United Petrochemical Company (United), an affiliated company of Saudi Basic Industries Corporation (Sabic).

“This [pipeline] project was conceptualised as an industrial integration project between Advanced’s propane dehydrogenation plant (PDH) and United’s ethylene plant,” Advanced said in a statement.

“This innovative project will create value addition to both companies by reducing the carbon footprint through adopting circular economy concept, upgrading the by-products containing high value chemicals from the stream with a positive environmental and financial impact for both parties,” Advanced added.

Greenfield petrochemicals complex

Advanced Polyolefins Company’s upcoming petrochemicals facility in Jubail 2 will have the combined capacity to produce more than 1.6 million tonnes a year (t/y) of PDH and polypropylene compounds.

The complex is expected to manufacture 843,000 t/y of propylene and 800,000 t/y of polypropylene, which will be used to produce specialty polymers for the face mask, automotive, pipes, food packaging and textile industries.

Advanced Polyolefins Company awarded the main EPC contracts for the project to South Korea’s Samsung Engineering and Italy-headquartered Maire Tecnimont in April 2021.

Samsung Engineering secured contracts worth a combined $1.198bn for two packages of the project. The South Korean contractor is executing EPC and project management works to build the PDH unit, as well as work on the utilities and offsites package. It expects to finish work on both packages in 2024.

Maire Tecnimont won a $500m contract to build two polypropylene-producing units, with a production capacity of 400,000 t/y each. The Italian contractor also expects EPC works on its package to be completed in 2024.

Saudi contractor Al-Rushaid Construction Company was awarded a contract in December 2021 to execute civil works for the project.

South Korea’s SK Engineering & Construction (SK E&C) has executed the front-end engineering and design (feed) work on the project. US-headquartered Fluor Corporation is the project management consultant. US energy contractor McDermott International’s subsidiary Lummus Technology is the provider of licensed technology and basic engineering services for a C3 CATOFIN unit as part of the project.

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Indrajit Sen

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