SAGIA EYES USD 100 BILLION TRANSPORT SPEND BY 2020

Saudi Arabia is poised to invest $100bn over the next 10 years to transform the kingdom into one of the world's leading transport and logistics hubs, a new report has said.

The Saudi Arabian General Investment Authority (SAGIA), the investment arm of the government, has identified 19 priority investment opportunities for transportation projects, it said in the report.

It added that the "strategic location and large-scale infrastructure development" will position the kingdom as one of the world's leading logistics hubs by 2020.

SAGIA said 15 of the projects would be based in the planned Economic Cities and overall, a $100 billion investment was anticipated over 10 years, Saudi Press Agency reported.

Of the projects, five would be ports, three would be aviation-related, three would be rail-based while another three would be roads-related, the report said. It added that five logistics centres were also planned for the kingdom.

"Studies indicate several opportunities for capacity expansions and operational enhancements with attractive opportunities for qualified port operators," the report said, adding that Jeddah Islamic Port alone could increase capacity by 30-50 percent.

SAGIA added that air operators would be sought to drive expansions to Saudi Arabia's air transport infrastructure, with significant upgrades already underway at Jeddah Airport and a new cargo village has been planned.

The rail infrastructure in Saudi Arabia is in need of major expansion, SAGIA said, with planned projects including the 950km Jeddah-Dammam Land Bridge and a 2,000km Mineral Line running north to south.

Arabian Business

source: http://www.sagia.gov.sa/en/SAGIA/Media-centre/News/SAGIA-eyes-USD-/

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SINOPEC to build two MTO projects in Henan

In Feb. 3, 2010, SINOPEC and Henan Provincial Government signed a memorandum of outstanding, deciding to set up a 1.8Mt/a methanol to 600kt/a olefins project in Baoshan Cyclic Economy Industrial Cluster, Hebi City, Henan Province.河南省鶴壁市

The project will be jointly executed by SINOPEC and Henan Coal & Chemical Industry Group (HNCC河南煤業化工集団）. The project shall combine coal mining, methanol synthesis, MTO (methanol-to-olefins) and downstream processing into an integrated operation. Work of the project preliminary stage is divided between HNCC, in charge of the coal mining design, and SINOPEC, in charge of that of methanol, MTO and the derivative plants, while relevant governmental departments of Henan province shall provide the supporting documents necessary for the project proposal. The project application report shall be accomplished and submitted to state authorities before June 2010.

According to the earlier released information, at the end of 2009, SINOPEC approved the ethylene feedstock diversifying project proposed by Zhongyuan Petrochemical 中原石油化学in Puyang濮陽市, Henan Province. This project was reported to cost around CNY1.5bn and use a SINOPEC self-developed SMTO process. Construction scope shall cover a 600kt/a methanol to 200kt/a olefin unit. Also, it includes the expansion of existing PE unit to 260kt/a and a new PP plant of 100kt/a capacity. Zhongyuan Petrochemical is a subsidiary of SINOPEC. It is currently operating a 180kt/a ethylene cracker, a 200kt/a PE unit, a 60kt/a PP unit, a 50kt/a C4 extraction and a 100kt/a aromatic extraction plant. 

Combining the news, SINOPEC is supposed to execute two MTO project in northern part of Henan Province. Firstly, the company will build a demonstration MTO unit of 200kt/a olefins in Puyang . Then a larger size MTO complex (600kt/a olefins) shall follow and to be built in Hebi.

According to the analysis of ASIACHEM, the existing naphtha crackers of under 300kt/a capacity in China will gradually lose their competitiveness with those coal-based olefin plants developed in China or ethane-based crackers boomed in Middle East. Therefore, the feedstock change project of Zhongyuan Petrochemical, once comes true, will be a good choice for SINOPEC, by the project not only the company can obtain commercial experience from the 200kt/a MTO operation and avoid the risk of one-step scale up to 600kt/a capacity, but also the existing downstream plants and distribution channels can be made full use to reduce investment cost.

SINOPEC has developed SMTO (initiated with S for SINOPEC) process as a technology reserve. In 2007, SINOPEC built a 100t/d SMTO commercial pilot unit in Yanshan Petrochemical. Then in 2008 the company developed 1.8Mt/a SMTO process package and acquired all capabilities necessary for the engineering & construction of full size MTO complex. 

Sinopec announced that it has all the capabilities to scale up the SMTO project to 1.8 Mt/a (methanol feedstock). 

Both Puyang and Hebi are located in northern part of Henan Province, belonging in one of the state planned 7 coal chemical industry bases, i.e. the borderland between Jiangsu, Shandong, Henan and Anhui Provinces. The abundance of local coal and water resources will provide a better foundation for SINOPEC to develop coal chemical projects.

Quoted from: New Kaznak

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WACKER Starts Production at China

WACKER starts production at China´s largest dispersible polymer powder plant in Nanjing

Today, WACKER, the Munich-based chemical group, officially opened its new dispersible powder and vinyl acetate ethylene dispersion plant in Nanjing, China. With an annual capacity of 30,000 metric tons of dispersible powder, the Nanjing plant is the largest of its kind in China. The aim of this investment project is to secure sufficient long-term VINNAPAS® polymer-powder capacity and to guarantee Asia-Pacific customers consistently high delivery reliability and product quality in the future, too. WACKER ranks among the world’s largest producers of dispersible polymer powders for the construction industry.

Located in the Nanjing Chemical Industrial Park, the new WACKER Nanjing site covers an area of 100,000 square meters. First phase investment of this fully integrated world-class production complex which serves the entire product line from vinyl acetate ethylene dispersions to dispersible powders is over 50 million euros. WACKER already has a staff of nearly 100 employees at its Nanjing facility. Along with WACKER’s dryer plant in Burghausen, Germany, the Nanjing plant is the largest of its kind in the world.WACKER has been producing polymer powders and dispersions for the construction industry for more than 50 years. VINNAPAS® polymer powders are thermoplastic, plasticizer-free polymers derived primarily from vinyl acetate and ethylene. It was in 1957 that WACKER chemists first succeeded in industrially manufacturing the first powder binder as an additive for dry-mortar mixes. Today, WACKER POLYMERS is a global market and technology leader in the field of vinyl acetate-based copolymers and terpolymers.China’s growing demand for VINNAPAS® dispersible polymer powders is chiefly due to the need for dependable, lightweight and energy-efficient building materials. Increasingly, Chinese houses are being lined with exterior insulation and finish systems (EIFS).

VINNAPAS® is a major component of the specialty mortars used in these systems. The dispersible polymer powder ensures that the individual layers which make up such systems are bonded together permanently.“A secure and high quality supply of polymer powders is essential for the further development of China’s fast growing construction industry and for China’s tremendous efforts to save energy”, explained Auguste Willems, Member of Wacker Chemie AG’s Executive Board. “This new site will not only provide a reliable supply chain backbone for WACKER POLYMERS in China over the next years with an increasingly competitive cost position and flexibility to better meet the local market demands. It will also enable us to provide our customers with first-class locally manufactured products and solutions, helping them to address the needs of their respective customers even better than in the past”, Willems said.In addition to EIFS, the dispersible polymer powders can be used in diverse building applications such as tile adhesives, self-leveling flooring compounds, plasters, repair mortars, water-proofing cementitious sealing slurries. They enhance important properties in the end product, such as adhesion, cohesion, flexibility and flexural strength. Water retention, processing properties and weatherability also benefit from VINNAPAS®. In China, from the Disney Land in Hong Kong to Baiyun Airport in Guangzhou, from the National Stadium in Beijing to Yincheng Dong Yuan Residential building in Nanjing, VINNAPAS® dispersible polymer powders are widely used in modern architectures.

Quoted from: New Kaznak

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Rio Tinto signs Oyu Tolgoi Investment Agreement - 2

Rio Tinto today signed an Investment Agreement with the Government of Mongolia for the development of the Oyu Tolgoi copper-gold complex in Mongolia's South Gobi region. Rio Tinto and Ivanhoe Mines Ltd, the development partners for the project, will now move forward with the government to address the conditions precedent and commence the development phase. Production is expected to commence in 2013, with a five year ramp up to full expected production of 450,000 tonnes of copper per year and 330,000 ounces of gold.

Bret Clayton, chief executive of Rio Tinto's Copper and Diamonds group, said that Oyu Tolgoi is consistent with Rio Tinto's strategy of investing in large, long life, low cost ore bodies.

"While the size and grade of the existing Oyu Tolgoi ore reserves and mineral resources are already world class, we are also excited by significant exploration upside that still remains," he said. "We plan to be a partner here in Mongolia for decades to come."

Mr Clayton said that the Oyu Tolgoi project holds great potential, both for the parties investing in its development, and for the people of Mongolia. " We believe Oyu Tolgoi will bring far reaching benefits for employees and communities directly linked to the mine, as well as for the people and industries indirectly connected to our operations."

Under the terms of the Investment Agreement and associated Shareholders' Agreement, the Government of Mongolia will own 34 per cent of Ivanhoe Mines Mongolia Inc LLC, the license holder of the Oyu Tolgoi Project. Key terms include a stable operational and tax environment, provisions dealing with the Government's equity participation and financing arrangements.

Rio Tinto initially made a US$303 million investment in a 9.95 per cent shareholding in Ivanhoe Mines Ltd in October 2006 under the terms of a Placement Agreement, and has the obligation to invest US$388 million for a further 9.95 per cent holding at the conclusion of an unconditional investment agreement with the Mongolian government (Tranche 2). Rio Tinto and Ivanhoe have recently agreed to a short term, month by month extension of the October 27 deadline for completing Tranche 2.

Under its current agreements with Ivanhoe Mines Ltd, Rio Tinto has the right to acquire up to 43.1 per cent of Ivanhoe's shares under fixed price options, with a right to further increase that interest to 46.65 per cent through on-market purchases.


Ivanhoe Mines Limited is a Canada-based international mining company with operations focused in Central Asia and the Asia Pacific region. The assets of the Company include Oyu Tolgoi Copper and Gold Project in southern Mongolia, its Cloncurry Iron-Oxide-Copper-Gold Project in Queensland, Australia and its Bakyrchik Gold Project in Kazakhstan.

Ivanhoe Mines also owns 80.5% of SouthGobi Energy Resources (SouthGobi). SouthGobi is developing the Ovoot Tolgoi Coal Project in southern Mongolia.

Quoted from: NEW KAZNAK

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Rio Tinto signs Oyu Tolgoi Investment Agreement

RIO TINTO and Chinalco have begun talks about jointly investing in Mongolia, only months after falling out over one of the largest and most acrimonious non-deals in corporate history.

The preliminary talks concern Oyu Tolgoi, in Mongolia's Gobi Desert, which is touted as the world's largest undeveloped copper and gold resource.



Earlier this month Rio Tinto, Canada's Ivanhoe Mines and the Mongolian Government signed an investment agreement that should lead to construction commencing in the northern spring. But the project is only 200 kilometres from the Chinese border and will require Chinese infrastructure, logistics and marketing co-operation.

"Chinese investment is inevitable," said an investment banker who advises Chinese companies on Mongolian and other investments.

"Rio Tinto needs China to make or transport the mining machinery, connect the electricity and water, build the rail link and of course to buy all the product," the investment banker said.

Chinalco, which is still Rio Tinto's largest shareholder despite the recent collapse of a $US19.5 billion ($21.4 billion) investment deal, is considered the most likely possible Chinese investor in the Oyu Tolgoi project.

It is understood to have got in first to register its interest with the National Development and Reform Commission, the agency responsible for trying to co-ordinate China's outward investment forays.

Sources close to both Chinalco and Rio Tinto confirmed that the companies are proceeding cautiously with early discussions about investment and co-operation at Oyu Tolgoi.

Any involvement by Chinalco in Oyu Tolgoi will be acutely politically sensitive, given Rio Tinto's present low standing in China and China's political and public relations problems in Mongolia.

In July a Chinalco spokesman, Lu Youqing, reportedly told a Chinese newspaper that Rio had "no business credibility" and that it was "not surprising" that executives such as Stern Hu were suspected of breaching the law. He later denied making the comment.

And Mongolia has bitter collective memories of Chinese imperial rule which are now overlaid with anxieties about economic annihilation. A well-placed Mongolian official told the Herald that his government rejected a request by China's Premier, Wen Jiabao, to visit earlier this month.

"We have something in our blood about China," the official said. "It will be very difficult for Chinalco to come into Mongolia."

The Oyu Tolgoi investment agreement says additional investors cannot be brought in without the consent of all parties, notably the Mongolian Government.

Alternatively, Chinalco could gain exposure to Oyu Tolgoi by seeking to invest directly in Ivanhoe Mines.

Rio Tinto holds its interest in Oyu Tolgoi through a 19.7 per cent stake in Ivanhoe and has options to raise its stake to 43 per cent.

Ivanhoe this week demonstrated its good relations with potential Chinese investors when its subsidiary SouthGobi Energy Resources issued a $US500 million convertible note to China Investment Corporation, China's main sovereign wealth fund, to develop an adjacent coal resource.

And the Mongolian official said China Shenhua Energy, China's largest coalmining company, is one of two front-runners to develop Talvan Tolgoi, the world's largest undeveloped coking coal resource.

Shenhua is leading a consortium to build a rail link up to the Mongolian border that could haul coal and copper concentrate from Oyu Tolgoi and Talvan Tolgoi into China.

China's presence in global mining investment is proving a headache as well as an opportunity for many countries in the region. But in many African nations China is the preferred investment source.


Rio Tinto may end up requiring Chinese co-operation to revive its other world-class mining prospect, the Simandou iron ore field in Guinea. Last year the Guinean Government tried but failed to hawk half of Rio Tinto's iron ore tenement to Chinalco, instead handing it to Israeli diamond miner Benny Steinmetz.

"Benny has been in Beijing trying to find a Chinese company to dig the mine and build the infrastructure," a Chinese resource company executive told the Herald.

Exacerbating the uncertainty, Guinea's minister for mining said last week he was negotiating up to $7 billion of mineral and oil deals with an opaque Hong Kong-listed company called China International Fund.

It is unclear whether those rights purport to pertain to assets controlled or recently appropriated from major mining companies in the area, such as Rio's.

Quoted From: NEW KAZNAK

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Borouge Awards $1.075bn Ruwais Ethane Cracker Contract to Linde

LONDON (ICIS news)--United Arab Emirates (UAE) based Borouge has awarded a $1.075bn (€757m) contract for the construction of a 1.5m tonne/year ethane cracker at Ruwais, Abu Dhabi, to German engineering firm Linde, the two companies said on Thursday.

The contract will be executed on a 'lump sum turnkey' basis whereby the construction work would be executed by the Consolidated Contractors Company (CCC), the companies said in a joint statement. 

The new cracker would complement the company’s 600,000 tonne/year and 1.5m tonne/year ethane crackers, the latter of which is currently under construction as part of the plant's expansion to 2m tonnes/year from 600,000 tonnes/year of polyolefins by mid-2010, and ultimately 4.5m tonnes/year of polyolefins by 2013.

After completion of the new cracker, Borouge would have the world's largest ethane cracker complex, setting a new benchmark for the industry, said the company.

"The awarding of this contract confirms Borouge's commitment to the Borouge 3 project, a major expansion of our production facility in Ruwais, which will increase the total capacity of the plant to 4.5m tonnes of polyolefins annually by the end of 2013," said Abdulaziz Alhajri, CEO of Abu Dhabi Polymers Company (Borouge).

He added that the expansion would also include the construction of second generation Borstar polypropylene (PP) and polyethylene (PE) units, a low density polyethylene (LDPE) unit and a butene unit, as well as related off-site utilities and marine facilities.

"Nowhere else in the world has a petrochemical company installed so much olefins capacity in such a short time as Borouge is currently doing in Abu Dhabi," said Aldo Belloni, member of the executive board of Linde.

Borouge is a joint venture between oil and gas major Abu Dhabi National Oil Company (ADNOC) and polyolefins producer Borealis.

quoted from: ICIS.com

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Philippine Petron upbeat on Petchems, Mulls Expansion

SINGAPORE (ICIS news)--Philippine major oil refiner Petron Corp intends to boost its petrochemicals production, bullish on the segment's potential contribution to its overall profitability, a senior company executive said on Monday. 

“We are very optimistic about out petrochemicals business over the long term. We expect petrochemical prices to increase as the global economy recovers,” Petron president Eric Recto told ICIS news in an interview.

The company has plans to invest up to $1bn (€710m) to upgrade its 180,000 bbls/day Limay refinery, which would be partly funded by the P10bn ($208m) it recently raised through issuance of fixed rate corporate notes, he said.

“We are looking at supplementing this by issuing preferred shares, but we do not have a firm schedule,” said Recto.

The company is now majority owned by Philippine food and beverage giant San Miguel Corp, whose president - Ramon Ang now sits as the chairman of Petron.

Petron has a $300m petrochemical facility in Limay, Bataan, housing a Petro Fluidised Catalytic Cracking (FCC) unit with a conversion capacity of 19,000 bbls/day and a 140,000 tonne/year propylene recovery unit that was inaugurated in April 2008.

It also has an aromatics plant that can produce 150,000 tonnes/year of benzene, 22,800 tonnes/year of toluene and 220,000 tonnes/year of mixed xylene that was commissioned last month.

The planned upgrade will include a PetroFCC 2 that will enable Petron to fully convert residual products to higher-value gasoline, liquefied petroleum gas (LPG), diesel and propylene.

“We are doing some feasibility studies prior to finalising our plans,” the Petron executive said.

Petron intends to cater primarily to domestic needs for petrochemicals while keeping an eye out on international markets such as southeast Asia as well as China, Recto said.

“As for export volumes, these will depend on the level of domestic demand for these petrochemical feedstocks,” Recto said.

“We started exporting propylene in April 2008 and we will be exporting benzene and toluene by July. We continue to export isomer grade xylene under term contracts to maximize price potential,” he said.

He cited that mixed xylene enjoys significant premium over other white products such as gasoline and diesel.

Early this month, the company closed a 5,000 tonne isomer xylene tender when prices in Asia were at $760-775/tonne FOB (free on board) Korea, according to global chemical market intelligence service ICIS pricing.

Petron is upbeat about the financial contributions of its new petrochemicals business notwithstanding the difficult business environment.

“We expect our venture into petrochemicals to immediately contribute to our bottomline despite a weak regional market,” Recto said.

He considers the softness in its product prices this year as just “all part of the cyclical nature of the market”.

“We expect prices of petrochemicals to further strengthen as the world economy recovers and demand for plastics and other petrochemical-based products resume growth,” Recto said.

The collapse in demand hit the global petrochemicals sector hard in the fourth quarter of last year as the global economy was racked by the financial and economic crisis. While there was some recovery in prices in the first quarter, most companies registered weak financial results.

Petron posted profits of Philippine peso (Ps)874m in the first quarter but sales volumes in the three-month period were down 20% year-on-year.

The company recorded a heavy net loss of Ps3.9bn in 2008 primarily due to the sharp decline in crude prices in the second half of the year. Crude hit an all-time high of $147/bbl in July last year before plunging to around $30/bbl levels in December.

“Now that the oil market has stabilized, we anticipate a healthier performance in 2009. We have already seen improvement in our first-quarter margins,” Recto said.

“The main challenge right now is the weakness in local fuel demand caused by the economic slowdown, resulting in very tough competition among domestic market players,” he added.

quoted from: ICIS

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LANXESS: Production in Singapore to Start in 2014

Postponement made necessary by drop in demand / New technology for the large-scale project / Bulk order from tire manufacturer Hankook 

Due to the continuing global economic crisis, specialty chemicals group LANXESS AG is postponing the construction of its new butyl rubber facility in Singapore. Production is now scheduled to start in 2014. LANXESS will use the time to finish developing an innovative technology for butyl rubber production that will then be used at the new facility. The 100,000 tpa plant originally planned for Singapore, which would have cost up to EUR 400 million to build, had been due on stream in 2012.  

Independent of the project postponement, LANXESS will continue to expand its presence in Singapore. The company is currently negotiating with the Singapore Economic Development Board (EDB) with a view to managing the global business of the Butyl Rubber business unit from there in the future. Said Heitmann: “This dynamic city is the hub of our activities in Southeast Asia and continues to play a key role in our highly successful strategy for the Asian region.” The Group currently runs the Southeast Asian business of all its 13 business units from Singapore.

LANXESS is a technology leader in the global market for synthetic rubber and supplies all the leading tire manufacturers and other customers worldwide. The focus is on the premium segment, including numerous new grades of rubber for energy-saving tires with improved running properties such as braking characteristics. A five-year agreement recently signed with South Korean tire manufacturer Hankook underlines the growing importance of the Asian market. This new supply agreement for butyl rubber covers the period from 2010 through 2014. LANXESS already concluded a long-term supply agreement with Hankook, the world’s seventh-largest tire manufacturer, for styrene-butadiene rubber and polybutadiene rubber in 2007. Hankook has a workforce of 14,000 and had sales equivalent to about EUR 2.5 billion in 2008.

quoted from: New Kaznak

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Unipol PP process from Dow selected by Pertamina for Balongan PP Project in Indonesia

UNIPOL(TM) Polypropylene Process Technology from Dow Basic Plastics has been selected by PT PERTAMINA for its new 250 KTA polypropylene facility at its Balongan complex in West Java, Indonesia. A license agreement for the facility was signed earlier this month. 
When the project is completed in 2011, the facility will produce a mix of polypropylene products including homopolymer, random copolymer and impact copolymers. Products will be marketed primarily in the domestic market. 

"Pertamina chose the UNIPOL PP Process because the technology will enable them to build and operate the most competitive and advantaged facility capable of producing a full range of performance polypropylene products to serve the market's ever changing needs," said Karen Shepard Jackson, global commercial director, Dow Polypropylene Licensing and Catalyst business. "Producers like Pertamina appreciate proven technology with a strong track record of reliability, flexibility, safety and advantaged economics. UNIPOL(TM) Polypropylene Technology and the advanced SHAC(TM) Catalyst Systems give licensees the capability to achieve economies of scale and offer a full range of products to customers." 

When this plant and others currently in the execution stage enter service, the technology will be used to produce nearly 11 million metric tons of polypropylene per year, which will represent more than 17 percent of total global capacity. 

Polypropylene is a versatile plastic used in packaging, durable goods, automotive parts, non-wovens, fibers, and consumer applications. 

About Pertamina 

PT PERTAMINA is the state-owned oil and gas company (National Oil Company) of Indonesia, established in 1957. Pertamina's scope of business incorporates an upstream sector covering oil, gas and geothermal energy exploration and production both domestically and overseas, and a downstream sector that includes processing, marketing, trading and shipping. Pertamina owns seven oil refineries and is one of the world's largest producers of natural gas. Pertamina's products include a wide range of fuels, LPG, LNG, chemicals, additives and retail products.

quoted from: New Kaznak

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Aramco, Conoco set Jan 31 Deadline for Yanbu Bids

KHOBAR, Saudi Arabia, - Saudi Aramco and U.S. company ConocoPhillips have asked contractors to submit bids for deals to build a joint venture refinery in the kingdom by Jan. 31, sources at contractors said on Tuesday. 


The two companies stopped the bidding process for the 400,000 barrels per day Yanbu refinery in November, one of several projects Aramco halted as it looked to cut costs. 

Cost estimates for Yanbu doubled last year to $12 billion, from $6 billion when the project was announced in 2006. 

Last week, Aramco and joint venture partner Total awarded contracts worth $9.6 billion for a similar-sized plant at Jubail. They saved more than $2 billion by asking contractors to revise bids to factor in falling costs for raw materials and a softer contract market due to the global economic downturn. 

Jubail, like Yanbu, had seen cost estimates rise to $12 billion at the peak of the commodities rally last year. 

Aramco and Conoco prequalified contractors to bid for six main process packages and to attend a meeting on the bidding to be held in Bahrain on July 14-15, contractors said. Tender documents would probably be issued in July or August. 

“We have a long bid preparation period, six months is a lot of time,” a source at one company interested in bidding told Reuters. “Usually Aramco gives a period of four months but they thought that bidders may request an extension.” 

The six packages are for crude, coking and gasoline units, a hydrocracker, tank farm and another facility to handle solids, sources said. 

A few more packages would also be tendered, and some smaller packages would be awarded to local firms, sources said. The Jubail refinery was broken down into 13 packages. 
More bidders 

More bidders have been invited to compete for Yanbu than Jubail, one source said, as Aramco and Conoco look for the most competitive prices. An average of 10 bidders would compete for each package, up from six or seven for Jubail deals, he said. 

“The number of bidders increased compared to Jubail,” he said. “They need more competition to get the best price.” 

The Yanbu refinery on the Red Sea coast was due to start operations in late 2014. Both it and Jubail would process heavy crude from Moneefa oilfield, Saudi Arabia’s largest-ever offshore oil project. 

South Korea’s Samsung Engineering Co is invited to bid for three process packages that include a coker unit, a crude facility and a gasoline unit. 

Japan’s Chiyoda Corp is interested in bidding for the coker unit, the crude facility and the hydrocraker. 

Italian contracting giant Saipem will be bidding for the hydrocracker, the gasoline unit, the crude facility and the coker unit. 

China’s Sinopec will be bidding for the coker unit, the crude facility and the gasoline unit. France’s Technip will be bidding for the coker unit, the crude facility, the gasoline unit and the hydrocracker. Spain’s Tecnicas Reunidas will be bidding for the coker unit and the gasoline unit. Japan’s JGC will bid for the gasoline unit, the coker unit and the hydrocraker. 

Among the 13 bidders that have been prequalified for the tank farm package are CB&I, Sinopec International Petroleum Service Corp, Punj Lloyd, Hyundai Heavy Industries, SK Engineering and Construction and others. 

Sources at contactors said bidders for the packages include companies listed below. =============================================================== COKER UNIT PACKAGE - Samsung Engineering Co (South Korea) 

· Chiyoda Corp (Japan) 

· Saipem (Italy) 

· Sinopec (China) 

· Technip (France) 

· Tecnicas Reunidas 

· JGC Corporation (Japan) CRUDE UNIT PACKAGE - Samsung Engineering Co 

· Chiyoda Corp 

· Saipem 

· Sinopec 

· Technip 

· Daelim 

· Hyundai GASOLINE UNIT PACKAGE - JGC Corp 

· Samsung Engineering Co 

· Saipem 

· Sinopec 

· Technip 

· Tecnicas Reunidas 

· Daelim HYDROCRACKER PACKAGE - Chiyoda Corp 

· Technip 

· JGC Corp 

· Saipem 

· CBI Lummus (US) and Petrofac (UK) 

· Daelim Industrial Company 

· GS Engineering and Construction 
TANK FARM PACKAGE - CB&I 

· Sinopec International Service Corp 

(China) 

· Punj Lloyd (India) 

· Hyundai Heavy Industries (S.Korea) 

· SK Engineering and Construction 

· Daewoo Engineering and Construction 

· Larsen & Toubro (India) 

· Petrosteel (joint venture between 

Rotary Engineering of Singapore 

and Saudi Arabia Rafid Group) SOLIDS HANDLING PACKAGE - Daelim Industrial 

- FLSmidth Koch (Germany) 

· GS Engineering and Construction Corp 

· Hyundai Engineering and Construction 

· JGC 

· Petrofac 

· Saipem 

· Techint (Argentina)

quoted from: Khaleej Times

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UAE to Make First Advanced Materials for Aircraft Production

ABU DHABI - Abu Dhabi will start this month to manufacture advanced composite materials to be used in the production of aircraft, a path-breaking project worth more than $2 billion involving partnerships with European aerospace companies including EADS and Airbus. 


Mubadala Development Company, an investment firm owned by the Abu Dhabi government, said on Sunday that it would start construction of its Abu Dhabi Composites plant on June 29. The facility, to be called Strata, would become operational in the fourth quarter of next year, it said in a statement.

The plant will manufacture components using advanced composites, including flap track fairings, ailerons, spoilers and assemblies for Airbus aircraft and separate components for ATR Regional Aircraft, a joint venture between EADS and Finmeccanica of Italy.

Advanced composites are lighter than traditional plane-making materials such as aluminum, and use of them requires some of the latest technologies available for the production of modern commercial aircraft. Strata marks a milestone in Abu Dhabi’s effort to diversify its economy with a focus on knowledge-intensive manufacturing. The emirate’s government hopes that Strata will form part of the core of a new aerospace industry in the UAE.

Strata has formed industrial partnerships with companies such as EADS, Airbus and Alenia Aeronautica, a part of Italy’s Finmeccanica. Initial contracts with these partners are worth more than $2 billion, Mubadala said.

The facility will focus at first on manufacturing composite components and assemblies, but it will progressively include engineering, design, and research and development, Mubadala said. “The construction of this plant is a crucial step for Abu Dhabi in achieving its ambition for Strata to become a Tier One supplier for the next generation of civil aircraft during the next decade and beyond,” Mubadala Aerospace Associate Director Homaid Al Shemmari said in the statement. 

· haseebhaider@khaleejtimes.com
quoted from: Khaleej Times

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Mitsubishi to Build Indonesian Petrochemical Facility

Mitsubishi is planning to build a coal-based petrochemical facility in East Kalimantan, Indonesia, according to local news reports. 

The 37ha petrochemical factory will be built with an investment of $1.5bn, writes Antara News. 

The company has completed a feasibility study for the plant's construction, Indonesian Chemical Industry Federation chairman Hidayat Nyakman said. 

The plant will require ten million tonnes of coal.

Mitsubishi is yet to finalise a continuous coal supply mechanism for its plant, Nyakman said. 

The cost of the project is expected to be high as the companies investing in this sector are required to develop infrastructure facilities on their own.

quoted from: Chemicals Technology

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Fiat Aims for GM Europe Merger

The head of Italian car firm Fiat has outlined plans to create Europe's biggest car maker by taking over General Motors' European operations, including the British Vauxhall and German Opel brands.

Sergio Marchionne met German ministers to tout what he called a "marriage made in heaven" on Monday, but the deal would require billions of dollars in financial support from governments.

Marchionne's plan includes merging the companies with Chrysler, the bankrupt US car maker, with which he sealed a partnership deal last week.

If realised, the combined group would be the world's second-biggest car maker with sales of about six to seven million vehicles a year and $107bn in revenues.

Karl-Theodor zu Guttenberg, Germany's economy minister, one of the ministers to meet Marchionne in Berlin, said Fiat wanted to take over GM's Opel unit without running up debt and would preserve its three main German assembly plants if successful.

Klaus Franz, Opel's labour leader, reacted cautiously.

"We will not be hostile to anyone but we will undertake a very careful risk analysis," he said.

'Social cost'

Opel employs about 25,000 people in Germany and the government is keen to save jobs at the Opel unit ahead of a September election.

The company also has plants in Spain, Belgium and Britain.

Analysts said planned job cuts could be a stumbling block to a deal.

"The big hurdle we can see is social cost. I'm not sure if the Italian or German governments have the appetite for the job losses a merger would entail," Michael Tyndall, an analyst at Nomura International, said.

While Opel's three assembly plants would be safe under Marchionne's plan, an engines and parts factory in Kaiserslautern, in western Germany, may be hit, Guttenberg said.

State guarantees

The minister said he would look at the details of the Fiat plan but was also considering other options.

He said that Fiat was not planning on taking on new debt but that it would require about $6bn to $9bn in bridge-financing and was seeking state guarantees from around Europe.

Previously, Opel had said it required $4.37bn in state guarantees.

Angela Merkel, Germany's chancellor, has said she is open to guarantees but has cautioned that a decision will depend on the feasibility of Opel's plans and on its finding a partner.

There are other potential investors interested in Opel, including Magna, an Austrian-Canadian car parts maker.

Fiat's shares were up 7.3 per cent in Milan in afternoon trading.

quoted from: Al Jazeera.Net

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ADCO to Award More Oil Projects by Year-end

ABU DHABI - The Abu Dhabi Company for Onshore Oil Operations, or ADCO, plans to award three more oil projects by the end of the year, thanks to a halving of related production costs, such as construction expenses, due to the financial crisis. 


ADCO, a unit of the Abu Dhabi National Oil Company responsible for onshore oil and gas operations, has finalised plans to award three new oil projects at the Bab 1.8, Beda Al Qamzan and Kuzwaira oil fields.

Once these fields are producing, they will together add 400,000 barrels of crude per day to ADCO’s daily output, enabling the company to pump at a sustained level of 1.8 million barrels per day by 2016, ADCO’s General Manager Abdul Munim Saif Al Kindy said on Thursday. 

This increased production would raise the UAE’s total petroleum output to 3.5 million barrels per day, Al Kindy told reporters.

Also on Thursday, ADCO signed an agreement for a gas compression project with South Korean company SKE&C. The deal, worth $818 million, calls for the installation of three gas compression stations at an area known as Tamama C within the Bab gas field complex. This project was initially estimated to cost $1.5 billion before the onset of the financial crisis. 

Al Kindy described the Bab project as an important component of ADCO’s overall gas production network. 

Tamama C currently holds 1.5 trillion cubic feet, or TCF, of recoverable gas. The Bab gas compression project would increase the amount of recoverable gas there by 2.5 TCF and extend the life of the Tamama C gas reservoir to 2030, ADCO said. 

ADCO’s goal is to maximise gas production in the Bab reservoirs from the year 2011. This gas would supply a plant operated by ADCO’s affiliate GASCO at Habshan. ADCO currently produces 5.3 billion cubic feet of gas per day. 

ADCO said it has saved $1 billion in costs on a project initially valued at $4.5 billion to develop the emirate’s Asab, Sahil and Shah oil fields. The work was awarded in February to a London-based engineering and construction company called Petrofac for $3.5 billion.

quoted from: Khaleej Times

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Sumitomo Chem, Saudi Aramco to study next phase of Petro Rabigh

TOKYO (ICIS news)--Japan’s Sumitomo Chemical has signed a memorandum of understanding (MoU) with Saudi Aramco to begin a feasibility study on the second phase of their Rabigh Refining and Petrochemical Co (Petro Rabigh) joint venture, the chemical producers said on Monday.

The study, which was scheduled to be completed by the third quarter of 2010, was an initiative by Sumitomo Chemical and Saudi Aramco, with Petro Rabigh providing support and assistance, the companies said in separate statements.

The study would evaluate the viability of the Rabigh II project, including investment amounts, to achieve a range of expansions.

The expansions included an additional 30m standard cubic feet/day of feedstock ethane for Petro Rabigh’s ethane cracker; building a new aromatics complex using around 3m tonnes/year of naphtha; and constructing various petrochemical production units, the companies said.

Those units would produce such products as ethylene propylene rubber (EPR), thermo plastic olefin (TPO), methyl methacrylate (MMA) monomer, polymethyl methacrylate (PMMA), low-density polyethylene (LDPE), ethylene vinyl acetate (EVA), caprolactam, polyols, cumene, phenol/acetone, acrylic acid, super absorbent polymers and nylon 6, according to the two companies.

Once the project is deemed financially viable, Petro Rabigh would be invited to decide on its implementation, with a target start-up in the third quarter of 2014, Sumitomo Chemical and Saudi Aramco said.

The two companies recently commissioned the first phase of Petro Rabigh in March, but production at the 1.25m tonne/year cracker has been unstable, which could push back the start-up of its derivative plants.

quoted from: www.ICIS.com

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BASF Delays Ethylene Expansion and MDI Project in China

Recently, a senior official of BASF told Chinese media that the company will delay two proposed projects - the jv ethylene expansion project in Nanjing, Jiangsu Province and the greenfield MDI in Chongqing.

According to the company, because the global economic crisis and the weak market demand, BASF will delay the two proposed projects, but the new schedule for these projects is not disclosed.

The jv ethylene expansion project is operated by YPC-BASF, which was planned to expand ethylene capacity to 750,000 ton/year from 600,000 ton/year by H2 2009 or H1 2010.

The proposed MDI project is located in Chongqing Chemical Industry Park (CCIP) Chongqing, which has capacity of 400 kt/a crude MDI to meet growing demand for this product in China. BASF has signed a MOU for the MDI project in Jun. 2007 with Chongqing Chemical and Pharmaceutical Holding (Group) Company and local authorities. And the project was expected to start up in 2012.

For the Chongqing MDI project, BASF also faced with the argument about the environment issues. 

On Jan. 2009, BASF got environmental approval from China’s Ministry of Environment Protection (MEP) for its proposed MDI project in Chongqing, with total investment of USD 1.18 billion, the project includes 400,000 t/a nitrobenzene, 300,000 t/a aniline, 400,000 t/a crude MDI and refining facility, 20,000 t/a MDI pre-polymer, storage facility and other utilities. According the BASF, the MDI project will use the most advanced technologies in environmental protection and met China's standard for discharge of pollutants.

But after the environmental approval disclosed, some Medias and environment protection organizations argued that if there is a huge risk of water resources safety as the MDI project may impact the Yangtze River and the Three Gorges Reservoir area. 


It is reported that BASF will suspend expanding capacity on a large scale of a petrochemical project in Nanjing, China. The Chairman, Mr He Binjie, said that they decided to suspend the expansion scheme of ethylene cracking plant in Nanjing, considering there would be no rebound in the global chemical market this year. 

The executive director of BASF, Pu Mule who is responsible for the East Asian market stressed that BASF has not given up plans to expand capacity, but has only decided to delay the pace of investment due to the current market conditions and will review the expansion as soon as the situation improves.

The project is a joint venture in Nanjing with China Petrochemicals entailing an investment of US $900 million aimed at expanding the ethylene cracker capacity from current 600,000 tons per year to 750,000 tons.

quoted from: New Kaznak

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Venezuela Pequiven, Japanese Firms Sign Petchem Agreements

CARACAS (ICIS news)--Venezuelan state producer Pequiven signed on Monday a broad array of energy agreements with several Japanese firms that could potentially lead to greater financing for petrochemical projects that are being threatened as lower oil prices erode the nation’s cash reserves. 

Pequiven signed a memorandum of understanding (MOU) with Japanese trading company Marubeni to explore the possibility of working together in olefin and polyethylene (PE) expansion projects at the Ana Maria Campos Petrochemical Complex and a new fertilizer plant at Jose. 

Pequiven signed another MOU with Mitsui to establish financing structures that would allow the trading house to participate in Venezuela’s petrochemical projects. 

Pequiven also signed a MOU with Mitsubishi to study possibilities in developing and commercialising ammonia, urea, polyolefins and methanol at Jose. 

The agreements, signed by Energy Minister Rafael Ramirez, would open the door to increasing energy exports to resource-poor Japan, while bringing in much needed outside financing to Venezuela. 

Venezuela’s President Hugo Chavez has said publicly that his nation’s ambitious petrochemical expansion plans would continue despite the economic crisis. But in recent weeks, the socialist-inspired leader has had to undertake a number of fiscal-tightening measures to adjust for lower oil prices, including rewriting a new budget to reflect an average price of $40/bbl instead of $60/bbl. 

Japanese trading houses are becoming increasingly active as minority partners in Venezuelan energy projects. Last year, Sojitz signed on as a partner in Pequiven’s and Braskem’s joint venture to build a polypropylene (PP) and PE plant at Jose. 

At the time, Braskem’s CEO said that Sojitz was a potential source of low-cost finance from Japan's state bank. The trading house could also assist with providing equipment at a competitive cost, as well as provide expertise with marketing the project's products.

quoted from: www.ICIS.com

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Dubai World Unit Sues MGM Mirage

DUBAI - Dubai World subsidiary Infinity World is suing Las Vegas-based casino operator MGM Mirage for breach of contract over their $8.6-billion CityCenter joint-venture, amid mounting concerns about the US project’s viability. 


The lawsuit, filed in the Delaware state Chancery Court in the US, aimed “to protect its rights and the best interests of the CityCenter project,” Dubai World said Monday.

MGM Mirage is burdened with more than $13 billion in debts related to CityCenter, its largest private development in the US so far.

MGM Mirage spokesperson Yvette Monet said she had no immediate comment on the lawsuit, when contacted at her Las Vegas office by Khaleej Times . 

Dubai World said that MGM’s recent disclosure to the US Securities and Exchange Commission — in which MGM said it doubted CityCenter’s viability as a going concern — constitutes a breach of contract.

In its lawsuit, Infinity World said it sought “declaratory relief from obligations under the joint venture agreement as a result of MGM’s breach.”

In its 10-k filing with the SEC, MGM said it “cannot provide assurance” that its business would generate sufficient cash flow from its operations, nor that it would be able to borrow enough money under its senior credit facility to pay off its debts or fund its other needs.  

CityCenter is a mixed-use luxury residential, resort and retail complex being developed by MGM on 67 acres between the Bellagio and Monte Carlo resorts on the Las Vegas Strip. It is owned by CityCenter Holdings LLC, the joint venture company owned equally by MGM and Infinity World. The complex, which started construction in 2005, is scheduled to open late this year. 

Dubai World said MGM’s admission that it cannot guarantee its ability to meet its future payments for CityCenter left the company with no option but to file the lawsuit.

“The current path of the project is simply unsustainable given our partner’s financial troubles, “ Dubai World said.

Dubai World also accused MGM of mismanaging CityCenter, with costs exceeding budgets despite a downsizing of some of the planned facilities.  

As a result, Infinity World was forced to make capital contributions far in excess of the levels that MGM had originally estimated.  

MGM said in August 2007 that CityCenter would cost an estimated $7.49 billion, but its costs have risen to about $8.8 billion. MGM anticipated being able to borrow $5 billion, revised that amount to $3 billion, and ultimately raised only $1.8 billion. Infinity World’s contributions to CityCenter to date total about $4.3 billion, Dubai World said. In its 10-K filing with the SEC, MGM said it obtained from its senior lenders a waiver of financial covenants that will expire on May 15. MGM’s lenders can then declare the company to be in default.

quoted from: Khaleej Times

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SABIC still Committed to Sinopec JV on Tianjin Cracker

SINGAPORE (ICIS news)--Saudi Basic Industries Corp (SABIC) said on Wednesday it remains fully committed to the cracker project at Tianjin in China with state-owned refiner Sinopec, dismissing market speculations it might pull out of the joint venture.

"China is the most important market for SABIC and we plan to continue growing our business in China," said the company in an e-mailed statement to ICIS news.

Speculations surfaced in the past few weeks that the Saudi major was considering to abandon the 1m tonne/year cracker project as market sources said there were disagreements over infrastructure issues.

The Tianjin cracker's derivative plants would include a 300,000 tonne/year linear low density polyethylene (LLDPE) plant, a 300,000 tonne/year high density polyethylene (HDPE) unit and a 400,000 tonne/year ethylene glycol (EG) plant, according to an earlier report from ICIS news.

One source close to the joint venture had said that SABIC "seemed to be dragging its feet" and still had not told Sinopec if it would truly take a stake in the project.

"SABIC has not made clear its intention and Sinopec did not think it was obligated to ask SABIC," said another source close to the project.

"There had been some disagreements on the infrastructure, and there was talk that the [early April] signing ceremony to confirm [SABIC’s involvement] could be postponed," said a third source close to SABIC. 

Sinopec officials declined to expound on the issue. They maintained that the project is still slated to start up by the end of the year.

quoted from: www.ICIS.com

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Sharq Delays New Al-Jubail PE, Cracker Project to H2 2009

SINGAPORE (ICIS news)--Eastern Petrochemical Co (Sharq) has further delayed the start-up of its new polyethylene (PE) and ethane cracker project in Al-Jubail, Saudi Arabia, to the second half of 2009, a source close to the project said on Friday.

"The main reason for the postponement is a construction delay," the source said. 

The project was earlier expected to go on stream in the second quarter of this year, after missing its first deadline in the fourth quarter of 2008.

The project will produce 1.3m tonnes/year of ethylene, 400,000 tonnes/year of high density PE (HDPE) and 400,000 tonnes/year of linear low density PE (LLDPE).

The Sharq project is part of close to 4m tonnes/year of PE capacity that is scheduled to start up in the Middle East in 2009.

Sharq currently operates two LLDPE plants with a total capacity of 750,000 tonnes/year at Al-Jubail.

Sharq is a 50:50 joint venture between Saudi Basic Industries Corp (SABIC) and Saudi Petrochemical Development Corp (SPDC), a Japanese consortium led by the Mitsubishi group.

quoted from: www.ICIS.com

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