Gulf Construction Online - $3.4bn elastomers plant deal awarded

Regional News

$3.4bn elastomers plant deal awarded

01 August 2012

AL JUBAIL Petrochemical Company (Kemya) has awarded engineering, procurement, and construction (EPC) contracts to Daelim Industries, Technip, and Tecnicas Reunidas for the construction of an elastomers facility in Saudi Arabia.

The world-scale specialty elastomers facility will be integrated with the existing Kemya complex and completion is expected in 2015.

With a total investment of $3.4 billion, which will be financed from shareholder and or third party debt, the facility will have the capacity to produce up to 400,000 tonnes per year (tpy) of rubber including halobutyl, styrene butadiene, polybutadiene, and ethylene propylene diene monomer (EPDM) rubbers, thermoplastic specialty polymers, and carbon black to serve local markets, the Middle East and Asia.

Kemya is a 50-50 joint venture between Saudi Basic Industries Corporation (Sabic)and Exxon Chemical Arabia, an affiliate of ExxonMobil Chemical Company.

Both Sabic and Exxon Chemical Arabia have collaborated closely since the Kemya joint venture was established in 1980, producing polyethylene, ethylene and propylene, and the new synthetic rubber project represents a significant broadening of Kemya’s product portfolio.

Associated with the new Kemya elastomers facility is the establishment of the High Institute for Elastomer Industries (HIEI), a vocational training centre in Yanbu, a Product Application Centre in Riyadh, and thermoplastic polyolefin (TPO) compounding and inventory management facilities in Jubail.

These facilities are aligned with the kingdom’s National Industrial Clusters Development programme to expand and diversify Saudi Arabia’s manufacturing sector.

The HIEI will employ innovative polymer science education programmes developed at the University of Akron Research Foundation (UARF), in Ohio, US, to train Saudi nationals for the country’s developing elastomers conversion industry. The HIEI is scheduled to begin classes next month.

Mohamed Al Mady, Sabic vice-chairman and CEO, said: “The Kemya elastomers facility demonstrates our commitment to build and champion a first-rate rubber industry in Saudi Arabia that supports job creation, develops downstream industries and helps diversify the national economy.

“The strategic partnership between Sabic and ExxonMobil provides the strength of industry-leading competitive assets, introduces new specialty products to the kingdom and offers global marketing and supply capability of exceptional quality.

“We will provide the building blocks for our customers to successfully compete on a domestic and international scale in markets for a wide range of applications.”

Steve Pryor, president of ExxonMobil Chemical Company, said: “ExxonMobil is proud to be a leading foreign investor in, and customer of, Saudi Arabia. This first-of-its-kind elastomers facility in the kingdom creates a platform that will support the development of a rubber industry, which is designed to produce a broad range of consumer products.”

An expanding transportation infrastructure in the Middle East and Asia-Pacific region has created strong demand for rubber products. The new world-scale Kemya elastomers project will help meet this ever-growing demand, according to the company.

The facility will rely on commercially competitive, high-impact technologies, including proprietary ExxonMobil EPDM, thermoplastic elastomer (TPE) and halobutyl rubber technologies.

“The expansion will employ the latest proprietary processes and product technologies to meet the growing global demand for specialty elastomers,” said Neil Chapman, senior vice-president, polymers, for ExxonMobil Chemical Company.

Koos van Haasteren, executive vice-president, Performance Chemicals, Sabic, added: “The project will help maintain an important focus on accelerating the growth and diversification of the kingdom’s manufacturing sector.”