Project Report: Dammam 7 - JAAAC Complex
Kathleen Bury looks at progress on Jubail's latest acrylic acid plant
Kathleen Bury, Contax project manager, looks at progress on Jubail’s latest acrylic acid plant
Despite the current economic climate, the total planned GCC energy capex landscape for 2009 to 2011 continues to show promise with around US$385bn worth of investments on the table. The dominant sectors continue to include the refining and petrochemical sectors, with about $82bn and $74bn respectively already planned for award by the end of 2011. Saudi Arabia continues to support a project capex position of 36% worth of the investment planned within the GCC energy space by 2011.
Contax Partners’ recent analysis of the ‘Impact of the Financial Situation on GCC Energy Project Workload’ indicates that the project postponement trend seen during 2007 and the early 2008 looks set to continue into 2009 with a considerable amount of award and execution schedule slippages. Nevertheless, given the GCC’s commitment to solidifying its global ‘petrochemical and refining hub’ position and developing its downstream presence, it is anticipated that a number of key projects will be realised in the long run.
A project that is expected to help Saudi Arabia to achieve its diversification goals is the Dammam 7 - Jubail Acrylic Acid and Acrylates Complex (D7JAAAC).
Background & strategic importance
Dammam 7, a company owned by Saudi shareholders and led by the Kanoo Group, is planning to build an acrylic acid and acrylates complex in the Jubail 2 Industrial Area, Saudi Arabia. The project is expected to require an investment of c.$400m and will produce a total output of 100 000tpa of butanol and 200 000tpa of acrylic acid as well as syngas, butanol and acrylic esters, which is expected to be supplied to local downstream ventures.
To achieve this, Davy Process Technology (DPT) and Union Carbide Corporation (UCC) were selected to provide the LP Oxo Selector 30 Technology with Normax Catalyst for the project. Given Aker Solutions previous experience with this technology, it is anticipated that the FEED stage will be fast tracked. Coupled with this, should the project owners secure the feedstock by the end of 2009, it is anticipated that the plant will begin operations in 2014. The development of the D7JAAAC project looks to set to satisfy a number of key strategic objectives:
1. Support’s Saudi Arabia’s diversification into the downstream petrochemical and specialty plastics market.
2. Enables the utilisation and optimisation of existing feedstock currently available within Saudi Arabia.
3. Enables the creation of employment opportunities within Saudi Arabia thus helping Saudi Arabia achieve one of its key aims, unemployment rate reduction.
Scope of work
The scope of work is anticipated to include the following: A butanol plant,syngas plant, acrylic acid and acrylates plant, offsites and utilities, pipelines and storage facilities.
Current economic and market dynamics are questioning the validity and schedules of many of the energy projects within the GCC. With the recession in buyer economies, there is a desire for project owners to take advantage of perceived lower critical input costs and drive down EPC bid prices and project financing issues; key projects are being postponed and cancelled on a weekly basis. Contax Partners’ continuous analysis of the impact of the current market dynamics on GCC Energy Project Workload provides clients with clarity around which projects have a 70%, between 40-70% and less than 40% probability of proceeding within the current economic climate and thus which sectors and countries will present the greatest opportunities.
Key project details:
Project Name Dammam 7 - Jubail Acrylic Acid and Acrylates Complex
Project Owners Dammam 7 Petrochemicals Limited
Contractors Consultant: Aker Solutions
FEED Contractor: Aker Solutions
EPC Award Date Q2 2011
Completion Date Q2 2014
Project activity - Proposed timeline/status
EPC ITB Issue - Q4 2010
EPC ITB Submission - Q1 2011
EPC Award - Q2 2011
Completion Date - Q2 2014
Following this analysis and as a result of the factors highlighted above, Contax Partners believes that the D7JAAAC project has a medium probability of going ahead as planned.
Contax partners opinion: Likelihood of project realisation – Medium
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