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Saudi chemical project contract awarded

28 August 2024

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Saudi Arabia’s Sahara International Petrochemical Company (Sipchem) has awarded the main contracts for a project to expand propylene and polypropylene plants in the Jubail area.

The contracts use the engineering, procurement and construction (EPC) model and will expand plants operated by Al-Waha, one of Sipchem’s affiliate companies.

The expansion project will boost production capacity at the facility by 72,000 tonnes of propylene and 150,000 tonnes of polypropylene.

The contracts were awarded to South Korea’s SGC eTEC Company and its subsidiary SGC Arabia and were worth a total of $169m, according to a stock market filing.

The contract duration is 28 months and the total production capacity after the expansion will be approximately 537,000 tonnes of propylene and 600,000 tonnes of polypropylene.

In its filing, Sipchem said: “This project reflects Sipchem's continuous efforts to enhance its production capacity and efficiency.

“Increased polypropylene production will contribute significantly to many industries, including automotive, fiber and food packaging films.

“This expansion will strengthen the company's position in the market and support its growth strategy.”

Chemicals expansion

In February, Advanced Polyolefins Company, a subsidiary of Saudi Arabia’s Advanced Petrochemical Company, awarded SGC eTEC Company the main contract for building an isopropanol plant in the kingdom’s Jubail Industrial City.

Under the terms of that award, SGC eTEC Company, along with its local unit SGC Arabia, will perform EPC works on the planned isopropanol facility.

The value of that EPC contract is $191.25m, Saudi Exchange-listed Advanced said in a filing on 18 February.

The isopropanol facility will have an output capacity of 70,000 tonnes a year (t/y) and use technology provided by Thyssenkrupp Uhde Engineering Services.

The duration of the EPC works is 32 months, with the commissioning of the project expected to take place in the last quarter of 2026.

Advanced first announced the isopropanol project in October 2020. The plant will be part of Advanced Polyolefins Company’s upcoming greenfield petrochemicals facility in Jubail.

SGC eTEC Company is also executing the main contract for a project to expand an ethylene cracker facility that is operated by Saudi Ethylene & Polyethylene Company (SEPC) in the Jubail area.

In February, SGC eTEC Company awarded Saudi Arabia's Al-Rushaid Construction Company (ARCC) a subcontract to perform construction works on the project.

SEPC awarded an approximately $500m contract to SGC eTEC Company, on 21 December last year, to perform the main EPC works on the project.

Tasnee Sahara Olefins Company (TSOC) is the majority shareholder in SEPC, owning a 75% stake. The remaining 25% stake is held by Dutch-American chemicals producer LyondellBasell.

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Wil Crisp

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