SAUDI ARABIA Fertilisers Co (Safco), says it had awarded to Italy’s Saipem a SR2 billion ($533 million) contract to build a fifth, large-scale fertiliser plant as part of expansion plans at its existing site in Jubail on Saudi Arabia’s east coast.
Under the turnkey engineering design, supply and construction contract, Saipem will build Safco’s fifth fertiliser plant with annual capacity to produce 1.1 million tonnes of urea, the company says.
The project will strengthen Safco’s operational and performance reliability and help it boost its competitiveness in the global chemical fertilisers industry, the company, an affiliate of petrochemical giant Saudi Basic Industries Corp (Sabic), says.
Construction is due to take 26 months, with commercial start-up scheduled for the third quarter 2014, it adds. Regional and international companies are targeting the fertiliser and petrochemical sectors in the Gulf for investments due to the wide availability of cheap natural gas, a commonly used feedstock in the industry. The Safco fertiliser complex is one of the largest in the world.
Safco will utilise its own resources to finance the project, Sabic chief executive officer and Safco chairman Mohamed Al Mady says.
The company in October announced that its third-quarter net profit doubled year on year to SR1.21 billion on the back of higher product prices internationally. Safco’s board of directors recommended paying a dividend of SR7 a share for the second half of this year.