Project Name: KARO - Aromatics Plant
Name of Client: PIC - Petrochemical Industries Company budget: $2,000,000,000
Main contractor: SK Engineering/Tecnimont
Facility type: Aromatics
Status: EPC Contract Award
PMC: Fluor
Location: Shuaibah
Project status
Kuwait Petroleum Corporation (KPC) gave its preliminary approval in the autumn of 1999 for the aromatics plant. The project has been under study for several years. It has been on hold for some time because of poor demand in the aromatics market.
In the second quarter of 2001, the project was given final approval to proceed. ITB for the PMC prequalification was issued. The following companies are bidding for the PMC contract: Amec, Bechtel, Fluor Daniel, Foster Wheeler
Bids for the PMC are due on January 30, 2002.
In mid-January 2002, the bid closing date was extended to February 10, 2002. Bechtel London were subsequently awarded the PMC contract. Bechtel will be responsible for the FEED and the management of sub contractors. They are currently developing the plot lay out for the Aromatics complex.
An MOU was signed with Dow Chemical for the Styrene Plant. PIC is currently evaluating offers by IFP and UOP for the process technology. PIC has invited EPC contractors to submit their prequalification details by 3rd Janauary 2004. The stipulation that contractors must have completed at least one contract outide of their home country in the last 10 years worth more than $1,500 million, greatly narrows the field of potential bidders and is perhaps designed to make contractors to form consortii and to prevent certain Asian companies from bidding on their own. It is believed that the cost of the BTX plant (Paraxylene & Benzene) will be in the region of $950,000,000 and the Styrene plant about $150,000,000. There will be additional costs associated with the offsites and utilities.
In late 2003, prequalifications were requested from potential EPC contractors. In mid-January 2004, the last date to submit prequalification documents was extended to February 7, 2004.
A pre-tender submission meeting was held in early December 2004.
On March 1, 2005, Kuwait Energy Minister Sheikh Ahmad Fahd Al Sabah laid the foundation for the project.
In late March 2005, the bid closing date was further extended to April 17, 2005. Bids were subsequently submitted in April. Bids were priced as follows:-
Technip $1,381 Million; GS Engineering (Formerly LG Engineering) $1,471 Million and SK Engineering/Technimont $1,295 Million.
Bids were submitted on the due date and as of early November 2005, it was believed that the following proces were submitted:- Technip $1,291 million, GS Engineering (Formerly LG Engineering) $1,259 million, SK Engineering/ Technimont $1,237 million
As of early January 2006, it was believed that the SK Engineering/Tecnimont have been shortlisted for the EPC contract. A formal contract award announcment is expected soon.
Project Scope
The proposed Aromatics Complex at Shuaiba will produce :
• 650,000 tpy of benzene and paraxylene
• 300,000 tpy of styrene
In addition to the Aromatics plant, a study has been completed for a 850,000 tpy Ethylene cracker which will be built alongside a 600,000 tpy ethylene glycol/ethylene oxide unit which would supply feedstock for the styrene unit. There is also a 400,000 tpy polyethylene plant under consideration.
It as estimated that the overall cost of this project would be in the region of $2 billion.
Completion for this project is likely to be 2007.
The most advanced technologies in CCR (Continuous Catalyst Regeneration) will be used to maximize aromatic yields,
The facility will require 2.5 million tpy of naptha as feedstock which will be supplied by KNPC.
Project Structure
A new company called the Kuwait Aromatics Company (Karo) has been formed by the Petrochemical Industries Company (PIC) to handle the project.
PIC is a subsidiary of the Kuwait Petroleum Corporation (KPC). PIC also owns 33 per cent stock in Gulf Petrochemical Industries Company (GPIC) in Bahrain, which produces methanol, ammonia and urea. It also owns a 30 per cent share of the Sino-Arab Chemical Fertiliser Company in China. It also has a 49 per cent share in SIAPE (a Kuwait-Tunisian joint venture for the production of phosphoric acid). Ashurst Morris Crisp have been appointed legal advisers to PIC.
The financial mandate for the aromatics project was awarded to Societe Generale in 2005. Financial closure is expected in early 2006. Financing is likely to consist of both commercial and islamic debt.
Schedules for this Project
Nov 2 2003 SOI for EPC contractors
Jan 3, 2004 Submission of prequalifications by EPC contractors
Feb 7, 2004 Extended submission of pre qualifications by EPC
contractors
2nd quarter 04 ITB to EPC contractors
3rd quarter 04 EPC bid submissions
Fourth quarter 04 EPC contract award expected
Nov, 2004 EPC Tender Issued
Mar 1, 2005 Foundation stone laid
Ma 7, 2005 EPC Bid closing date (Original)
Ap 3, 2005 EPC Bid closing date (Extended)
Ap 17, 2005 EPC Bid Closing Date (Extended)
Sep 2005 Revised EPC bids due
Early 2007 Targetted Plant Operation
