RIYADH, 4 April 2006 — The Saudi International Petrochemicals Co. (Sipchem) has signed an SR4 billion contract with a consortium of Canadian, German and French firms for the construction of acetic acid and vinyl acetate plants in Jubail.
Abdul Aziz Al-Zamil, chairman of Sipchem board of directors, signed the contracts with Fluor Canada on behalf of his company for the construction of an acetic acid plant with an annual production of 460,000 tons, a vinyl acetate plant with an annual production capacity of 300,000 tons, and the common utilities for the complex.
It was also announced that Sipchem was planning to go public early this year, when it will float 45 million shares (comprising 30 percent of its SR1.5 billion capital) as part of the initial public offering (IPO). An agreement with the Capital Market Authority (CMA) is expected to be signed in three weeks.
Sipchem also selected the joint venture between Lurgi AG of Germany and Air Liquide of France for building a carbon monoxide (CO) plant with an annual production capacity of 345,000 tons on a turn key basis.
Licensing agreements for the acetic acid and vinyl acetate monomer plants were signed earlier with US-based Eastman and Dupont companies. Work has got under way on these projects, which are expected to go on stream by early 2009.
Speaking after the signing ceremony, Al-Zamil said: “The acetyl project represents a major achievement for Sipchem and its partners. It is in line with the company’s vision and objectives in investing in integrated and petrochemical projects that would provide higher returns for the shareholders and the national economy at large.”
The acetic acid and the vinyl acetate monomer projects are owned jointly by the SIPC and Helm Arabia GMBH & Co. AG. The CO project is owned jointly by SIPC and the National Energy Company (Saudi company).
Al Zamil said a salient feature of the projects is that these projects mark the company’s investment in integrated petrochemical projects that would provide higher returns for the shareholders and the national economy at large.
He said the acetyl projects complex consists of three projects-the carbon monoxide plant with an annual production capacity of 345,000 tons; the acetic acid plant with an annual production capacity of 460,000 tons; and the vinyl acetate plant with an annual production capacity of 300,000 tons. The total cost of these projects is SR4 billion.
He added that the projects are commercially important, since they open up the possibility of manufacturing a variety of other chemical products that depend on their products, such as dyes, timber, industrial additives, etc.
SIPC is a Saudi joint joint stock company founded in late 1999 with a share capital that currently amounts to SR1.5 billion. At present, it operates a methanol plant with an annual production capacity of one million tons and a Butanediol plant with an annual production capacity of 75,000 tons.