McDermott details contract award for Jubail PDH-PP complex

McDermott International Inc. has confirmed details of its scope of work on an earlier awarded contract by Advanced Petrochemical Co. (APC) for subsidiary Advanced Global Investment Co.’s (AGIC) proposed propane dehydrogenation (PDH) and polypropylene (PP) complex at APC’s existing operations in Jubail Industrial City, on Saudi Arabia’s eastern coast (OGJ Online, May 15, 2020).

McDermott’s Lummus Technology—alongside catalyst partner Clariant International Ltd.—will license its proprietary CATOFIN PDH technology process as well as provide the basic engineering package for a C₃ CATOFIN unit to be installed at the new complex, the service provider said on May 21.

Once in operation, the new unit will have a propylene production capacity of 843,000 tonnes/year.

McDermott, which reflected the order in its first-quarter 2020 backlog, valued the contract at $1-50 million.

This latest contract for the project follows AGIC’s contract award earlier this month to Fluor Corp. for delivery of project management consultancy (PMC) on the complex, which alongside propylene, also will produce 800,000 tpy of PP that will be used for production of specialty polymers by manufacturers in the face mask, automotive, pipes, food packaging, and textiles industries.

APC also previously confirmed AGIC has let a contract to LyondellBasell Industries NV subsidiary Basell Poliolefine Italia SRL to license its proprietary Spherizone and Spheripol technologies for the complex’s two PP plants, each of which will have a capacity of 400,000 tpy.

Award of the technology and PMC contracts follow AGIC’s Mar. 27 signing of a shareholders agreement with SK Gas Co. Ltd. subsidiary SK Gas Petrochemical Pte. Ltd. (SKGP) to establish a joint venture named Advanced Polyolefins Co. (APC JV)  for construction and operation of the proposed PDH-PP complex.

At a total estimated cost of about $1.8 billion, the planned PDH-PP project will be financed 25% by equity of shareholders, while APC JV will finance the remaining 75% via borrowing from lenders, APC said. AGIC will hold 85% interest in APC JV, with SKGP to hold the remaining 15% stake.

APC said APC JV expects to begin construction in 2021 on the new PDH-PP complex—which will receive its main feedstock of propane from Saudi Aramco under a long-term contract—for a targeted start-up of operations by second-half 2024.

APC currently produces 455,000 tpy of propylene and 450,000 tpy of PP at its existing Jubail Industrial City plants, according to the company’s website.