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Samsung confirms Saudi chemical contract award

28 September 2023

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South Korea’s Samsung Engineering has issued an official statement confirming that it has been awarded the front-end engineering and design (feed) contract for Alujain Corporation’s planned propylene plant in Saudi Arabia’s Yanbu Industrial Complex.

MEED revealed that Samsung was working on the feed contract for the petrochemical project earlier this month.

In its statement, Samsung said that it had been given the notice of award for the feed contract for the facility, which is being developed by Alujain and will produce propylene and polypropylene (PP).

The scope of the contract will also include utilities and offsites.

The value of the contract is $19.4m and the feed work is expected to be carried out in Samsung Engineering’s offices in the South Korean capital of Seoul until May 2024.

The regional project-tracking service MEED Projects has estimated that the EPC contract will be worth $2bn.

The propane dehydrogenation (PDH) plant, which produces propylene, will have an annual capacity of 600,000 tonnes, and the PP plant will have a yearly capacity of 500,000 tonnes.

Samsung Engineering said: “Alujain has expressed its confidence in Samsung Engineering by awarding feed after previously awarding Samsung Engineering with the pre-feed contract.”

The South Korean company also said that it intended to win the engineering, procurement and construction (EPC) contract.

Samsung Engineering said it expected the EPC contract for the petrochemical project to be released in mid-2024.

It has already executed 32 projects in Saudi Arabia, five of which were propylene projects.

Samsung Engineering also worked on the Luberef lube base oil plant in Yanbu, located near the planned Alujain petrochemical project site.

Hong Namkoong, president and CEO of Samsung Engineering, said: “As we are proceeding from the initial pre-feed stage to the feed stage of the project, we are applying all of Samsung Engineering’s innovative technologies.”

In May, it was announced that Alujain had selected the C3 Catofin PDH technology from US-based Lummus Technology for the planned propylene plant.

The scope of work for Lummus Technology covers the provision of the technology licence and basic engineering.

Alujain said in April this year that it intends to accelerate work on the planned project.

In a filing with the Saudi Stock Exchange (Tadawul) on 10 April, it said it would improve its business through “accelerating work on the development of engineering works and then the construction and operation of the company’s new factory to produce propylene, polypropylene and other specialised products”.

MEED’s October 2023 special report on Saudi Arabia includes: 

> POLITICS: Saudi Arabia looks both east and west
> SPORT: Saudi Arabia’s football vision goes global
> ECONOMY: Riyadh prioritises stability over headline growth
> BANKS: Saudi banks track more modest growth path
> UPSTREAM: Aramco focuses on upstream capacity building
> DOWNSTREAM: Saudi chemical and downstream projects in motion
> POWER: Riyadh rides power projects surge
> WATER: Saudi water projects momentum holds steady
> GIGAPROJECTS: Gigaproject activity enters full swing
> TRANSPORT: Infrastructure projects support Riyadh’s logistics ambitions
> JEDDAH TOWER: Jeddah developer restarts world’s tallest tower

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Wil Crisp

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