Saudi Sadara CEO: All Major Contracts To be Awarded By 3Q 2012

Date : 03/07/2012 @ 11:24PM
Source : Dow Jones News
Stock : Dow Chemical Company (The) (DOW)
Quote : 63.19  -1.14 (-1.77%) @ 7:47PM

Saudi Sadara CEO: All Major Contracts To be Awarded By 3Q 2012

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(This story was originally published Wednesday.)

--Two thirds of EPC contracts already awarded

--Plans to go public, timing not set yet

--Looking at options for financing, including sukuk

By Ellen Knickmeyer

Of ZAWYA DOW JONES

JUBAIL, Saudi Arabia (Zawya Dow Jones)--Sadara Chemical Co., a joint venture between Saudi Arabian Oil Co. and Dow Chemical Co. (DOW), will award all major contracts by the third quarter to build its $20 billion petrochemical complex, according to the company's top executive.

State-giant Saudi Aramco and Dow officially formed joint venture Sadara late last year to build one of the world's largest chemicals plants in the oil-rich kingdom's Eastern Province on the Persian Gulf coast.

All major contracts will be awarded by the third quarter, Sadara's Chief Executive Officer Ali Abuali said at a Saudi petroleum conference, adding that two thirds of the engineering, procurement and construction contracts had already been awarded.

In October, a senior Aramco executive responsible for chemicals, told reporters in Dammam that the joint venture would award all engineering, procurement and construction, or EPC, contracts for its petrochemical complex by the second quarter of 2012.

Abuali also said that the company planned to go public at some point, but added that "the timing is not set yet". The company was still in the early stage of preparing finance, and was currently looking at "all products," for financing, including Islamic bonds, or sukuk, he said.

Saudi Arabia is ploughing billions of dollars into developing its petrochemical industry in a bid to add value to its vast hydrocarbon resources and to create jobs for its young and growing population.

Sadara will produce polyeurethanes, propylene oxide, propylene glycol, elastomers, linear low-density polyethylene, low density polyethylene, glycol ethers and amines. First production units are expected to come on line in the second half of 2015, while all units are expected to be up and running in 2016.

-By Ellen Knickmeyer, Dow Jones Newswires, +971 55 1093359, ellen.knickmeyer@dowjones.com

Copyright (c) 2012 Dow Jones & Co.




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