National Industrial Gases Company (GAS), an affiliate of Saudi Basic Industries Corporation (Sabic), has awarded a lump sum turnkey contract for the engineering, procurement and construction of an air separation plant to Air Products Plc.

The plant will be constructed in Yanbu Industrial City and is scheduled for completion by the middle of 2005. The capacity will be 800 tons of oxygen per day.

Established twenty years ago, and based in Jubail and Yanbu, the National Industrial Gases Company produces oxygen, nitrogen, argon, and krypton-xenon.

Commenting on the announcement, Mohamed Al-Mady, Vice Chairman and CEO of Sabic, said:  'As Sabic grows and moves towards its total production target of 48 million tonnes per year (tpy) by 2010 we will need more oxygen as a feedstock for our downstream plants.  I am pleased to say that this new contract will help supply some of that additional raw material.'

In further construction news Sabic  announced plans to construct a new Ethylene Glycol (EG) plant at Jubail United Petrochemical Company (United).  This, Sabic's seventh EG plant, will have an annual capacity of 625,000 tonnes.

The plant is expected to go on stream by the end of 2005, and will be the second EG plant at United, adding to the existing 575,000 tpy EG plant that is currently under construction.

The plant will use new technology from the US based Scientific Design Company - Sabic and Sud-Chemie manage Scientific Design through a 50:50 joint venture.  Ethylene and oxygen feedstock for the new plant will be provided by other Sabic companies - oxygen from its GAS affiliate; and Ethylene from United and Petrokemya (the Arabian Petrochemical Company).

The new plant will boost Sabic's position as a leading global producer of EG, and help enhance the company's competitive reach both worldwide and in the Middle East.
By 2006, SABIC's total EG production will reach 3.5 million tpy - meeting over 20 per cent of global demand.  1.5 million tonnes will be produced at SHARQ (Eastern Petrochemical Company, Al-Jubail); 1.2 million tonnes at United (Jubail United Petrochemical Company); 800,000 tonnes at Yanpet (Saudi-Yanbu Petrochemical Company, Yanbu).

Sabic's construction programme has taken further steps afield as it awards its first non-european contract. Samsung Engineering said it has won a US$50 million order from Sabic to build a Butene-1 producing plant on a turnkey basis.

In winning the order, Samsung has become the first non-European company to be awarded a plant bid from Sabic, which invests an annual US$1 billion in petrochemical plant production, it said.

Samsung will be responsible for the entire project from design and procurement to construction and test runs by March in 2005.

The plant will supply 130,000 tonnes of the product annually to polyethylene and polypropylene factories.

Samsung is also involved in the construction of US$350 million worth of factories for propane dehydrogenation and polypropylene at the Al-Jubail industry complex in Saudi Arabia.

The northeastern China-based industrial group, Dalian Shide, also signed an agreement in principle with Saudi Arabia's Saudi Basic Industries Corp. (Sabic) on the expansion of an ethylene facility in Liaoning Province to 400,000 tonnes early this month, according to an announcement made by the Liaoning provincial government on its official website. Both Dalian Shide and another chemical company, Liaoning Huajin Chemical (Group) Corp., are participants in the project, which has registered capital of USD 606 mln. The capacity expansion will be made at an existing ethylene facility owned by Huajin Chemical in Panjin, Liaoning. The facility currently has an annual output of 130,000 tonnes.

Under the agreement, the Chinese and Saudi Arabian side will each hold a 50 per cent equity in a joint venture, and dispatch the same number of people to and from a joint-venture commission which will decide on the value of assets, the application of technology and selection of engineering contractor for the project.

An official with Dalian Shide responsible for the ethylene project reported that the project is still in its infancy and that there are still many uncertainties to be overcome. Dalian Shide, one of the largest private enterprises in China, has been seeking interests in the petrochemical industry, and agreed to set up a 500,000-tonne PVC facility in eastern China's Qingdao in 2000. Sabic officials visited the company's headquarters in Dalian in June 2002. Liaoning Huajin Chemical claims to be among the largest fertilizer producers in China with an annual output of 1.3 mln tons. The company has a listed vehicle trading on the Shenzhen Stock Market.