Sadara Chemicals Complex, Al Sharqiya, Saudi Arabia
Sadara Chemical Company is constructing one of the world's largest chemicals complexes in Jubail Industrial City in Al Sharqiya, Saudi Arabia. It will be located about 100km north-west of the city of Dammam.
The fully integrated complex will consist of 26 chemical manufacturing units and be one of the largest of its kind in the world. It will produce about 1.5 million tons per annum (mtpa) of ethylene and about 400,000tpa of propylene.
The complex will also produce a variety of chemicals, such as amines, propylene glycol, polyurethanes, low density polyethylene, linear low density polyethylene, elastomers, glycol ethers and propylene oxide.
These chemicals are used in the manufacturing of consumer goods, energy, transportation, packaging, electronics and furniture industries. The project is estimated to cost $20bn.
The complex is expected to generate revenues of about $10bn per annum within ten years of the start-up of operations. The project is expected to generate thousands of direct and indirect jobs and attract several downstream investments.
Ownership of the Saudi Arabian complex
The Jubail integrated chemical complex will be owned and operated by Sadara Chemical Company, a joint venture between The Dow Chemical Company (Dow) and the state oil company Saudi Aramco.
The two companies will hold equal stake in Sadara and fund about $7bn. An initial public offering (IPO) to raise equity for this amount is scheduled to be offered during 2013-14. The remaining $13bn will be in the form of loans from financial institutions and export credit agencies.
Background to the joint venture chemicals project
Dow and Saudi Aramco have been planning to establish and operate a world scale complex since 2007.
The facility was planned to be located in Ras Tanura, but was later cancelled due to technical and financial difficulties. An extensive feasibility study and front-end engineering and design (FEED) were carried out before the final approval to build the complex at Al-Jubail was received in July 2011. The FEED was completed by KBR.
The Sadara complex is being built as part of Saudi Aramco's strategy to grow in the downstream markets. The company will oversee the execution and project management of the complex. The products will be marketed by Sadara in the Middle East region.
Dow will supply the industrial processing technologies for the complex. The company will also be responsible for marketing the products in other parts of the world. The planned exports include about 45% to Asia, ten percent to Europe and 25% to the Middle East.
Engineering, procurement and construction (EPC)
In August 2005 Saudi Arabia's Saudi Aramco and Japan's Sumitomo Chemical agreed to form a 50:50 joint venture to develop a petrochemical complex in Rabigh, Saudi Arabia.
The chemicals complex will be the first large-scale project to be constructed in a single phase. Sadara Chemical awarded an engineering, procurement and construction (EPC) contract for the main mixed feed cracker to Daelim of South Korea in July 2011. The contract is valued at $920.3m. The flexible cracker will break the naphtha and ethane feedstock to produce about 3mtpa of chemical products and plastics.
Daelim is also reported to be the lowest bidder, against Samsung Engineering, for building parts of the other production units at the Sadara complex. They include analine, methylene di-para phenylene isocyanate (MDI), mononitrobenzene (MNB), toluene di-isocyanate (TDI), formaline and dinitrotoluene (DNT) units.
Fluor was awarded a $2bn EPCM contract in August 2011 for developing all the offsite work and utilities at the site. The scope of work will include development of associated infrastructure and pipework arrangements to allow the construction of the complex.
Global Engineering and Construction Group, a unit of Foster Wheeler, was awarded an EPCM contract in February 2012 for a propylene oxide unit. The contract is an extension to the FEED contract awarded in 2008.
In June 2012, Jacobs Engineering won an EPCM contract for three polyethylene units. Scope of work includes construction management, engineering support, procurement and project services support.
Tecnicas Reunidas won an EPC contract to develop the chem-III project as part of the chemical complex in July 2012. It will provide detailed engineering and procurement services for six product plants, as well as auxiliary and control facilities.
Maire Tecnimont was awarded an EPC contract to build a manufacturing plant at the complex.
Production from the first units of the complex is expected to start in the second half of 2015. All the units are expected to be on-line by 2016.
Feedstock at Sadara Chemical Company's complex
The complex will use ethane and naphtha derived from oil and natural gas liquids as feedstock. The feedstock is cracked into propylene and ethylene at the cracker units.
The feedstock will be supplied from the Saudi Aramco Total Refining and Petrochemical Company's (SATROP) refinery, which is currently under construction in Al-Jubail.
The refinery is expected to be fully operational by the fourth quarter of 2013. The raw materials will also be sourced from local refineries.
Feedstock for the propylene oxide unit will be supplied by a new hydrogen peroxide plant to be constructed by the 50:50 joint venture of Sadara Chemical and Solvay.
In April 2012, Linde was awarded a long-term contract to supply carbon monoxide, hydrogen and ammonia gases for the chemical complex. These gases will be used in the production of aromatics, amines and hydrogen peroxide. Under the contract, Linde will build a HyCO facility and an ammonia plant with an investment of $380m.
The JUPC complex is centered around a cracker producing one million tonnes per year of ethylene. The complex was built in Jubail Industrial City, Saudi Arabia.
During May 2007, Dow Chemical announced that it had signed a detailed memorandum of understanding with Saudi Aramco for the two companies to build, own and operate a joint-venture petrochemical complex in Ras Tanura, Saudi Arabia.