Sharq Third Expansion Project, Jubail, Saudi Arabia

During June 2004, the board of Saudi Arabia's Sabic announced that it had approved an investment of $6.4 billion for the expansion of its petrochemical capacity.

The plans included increased capacity at its affiliate Eastern Petrochemical Company (Sharq). The company is a 50:50 joint venture between Sabic and a Japanese consortium, led by Japan's government and the Mitsubishi group of companies. Sharq's plans included an investment of $2.28 billion in ethylene and downstream capacity located in Jubail, Saudi Arabia.

This project is known as the Sharq third expansion project. Completion is slated for 2008.

PROGRAM MANAGEMENT

During September 2005 Sabic awarded a program management services contract to Foster Wheeler Energy. The contract covers the Engineering, Procurement and Construction (EPC) management of the Sharq expansion project.

ETHYLENE PLANT CONSTRUCTION CONTRACT

In July 2005 the UK's Stone & Webster, part of the Shaw Group, was awarded a contract by Sharq to provide EPC services for a 1.3 million tpa ethylene production plant. The contract is valued at approximately $900 million.

ETHYLENE TECHNOLOGY

The ethylene plant will utilise technology provided by Shaw Stone &Webster.

ETHYLENE GLYCOL CONSTRUCTION CONTRACT

An EPC contract for a 700,000tpa ethylene glycol plant was awarded to Korea's Samsung Engineering Company. Once complete, Sharq's total ethylene glycol capacity will reach 2.0 million tpa.

LINEAR LOW AND HIGH DENSITY POLYETHYLENE CONSTRUCTON CONTRACT

Germany's Linde-KCA-Dresden was awarded the EPC contract to build an 800,000tpa plant producing both linear low density and high density polyethylene (lldPE and hdPE). Once this plant is complete, Sharq's total lldPE/hdPE capacity will be 1.6 million tpa. Completion is slated for the first quarter of 2008.

UTILITIES AND OFFSITES

Foster Wheeler Energy and Foster Wheeler Arabia were awarded the EPC management contracts for the complete utilities and offsites facilities to support the Sharq expansion project. The contract value is put at €500 million ($597 million).

STORAGE TANKS AND PRESSURE VESSELS

Chicago Bridge & Iron (CB&I) was awarded a contract to design and build storage tanks and pressure vessels for Sharq's petrochemical expansion project. The contract covers the engineering, procurement, fabrication and construction of eight vessels, including two double walled tanks for the storage of ethylene and propylene and two stainless steel tanks for storing ethylene glycol. Completion is slated for the autumn of 2007. Contract value is put at $40 million.

BACKGROUND

Sabic claims that once the expansion is complete, Sharq will become one of the world's largest petrochemical sites. The Sharq expansion project will add a total capacity of 2.8 million tpa to Sabic's total output and at the same time enhance Sharq's position as the world's single largest producer of ethylene glycol. Sharq was established in 1981.