Petrochemical giant Saudi Basic Industries Corporation (Sabic) said its joint venture with ExxonMobil has awarded an engineering, procurement and construction (EPC) contract for its mammoth $3.4 billion elastomers project in Jubail city.

The contract was awarded by Sabic JV, Al Jubail Petrochemical Company (Kemya), to a trio of international firms - South Korea's Daelim, France's Technip and Spain's Tecnicas Reunidas.

As per the deal, the trio will construct a top specialty elastomers facility at the Kemya plant. The facility will be integrated with the existing Al-Jubail complex and completion is anticipated in 2015.

The total investment of $3.4 billion for the elastomers facility will be financed from shareholder and or third party debt, said Kemya in a statement.

On completion, the facility will have the capacity to produce up to 400,000 tonnes per year of rubber including halobutyl, styrene butadiene, polybutadiene, and ethylene propylene diene monomer (EPDM) rubbers, thermoplastic specialty polymers, and carbon black to serve local markets and those in the Middle East and Asian region.

Along with the elastomers facility, Sabic will be setting up the High Institute for Elastomer Industries (HIEI), a vocational training center in Yanbu, a product application center in Riyadh, and thermoplastic polyolefin  compounding and inventory management facilities in Al-Jubail.

These facilities are aligned with the Kingdom’s National Industrial Clusters Development Program to expand and diversify Saudi’s manufacturing sector, said a senior official.

The HIEI will employ innovative polymer science education programs developed at the University of Akron Research Foundation (UARF), in Ohio, US to train Saudis for the Kingdom’s developing elastomers conversion industry. The HIEI is scheduled to begin classes in September 2012.

On the project, Mohamed Al-Mady, Sabic vice chairman and CEO said, 'The Kemya facility demonstrates our commitment to build and champion a first-rate rubber industry in Saudi that supports job creation, develops downstream industries and helps diversify the national economy.'

'The strategic partnership between Sabic and ExxonMobil provides the strength of industry-leading competitive assets, introduces new specialty products to the Kingdom and offers global marketing and supply capability of exceptional quality.'

'We will provide the building blocks for our customers to successfully compete on a domestic and international scale in markets for a wide range of applications,' he stated.

“ExxonMobil is proud to be a leading foreign investor in, and customer of, the Kingdom of Saudi Arabia,” said Steve Pryor, the president of ExxonMobil Chemical Company.

“This first-of-its-kind elastomers facility in the Kingdom creates a platform that will support the development of a rubber industry, which is designed to produce a broad range of consumer products,” he added.

Neil Chapman, senior VP, polymers, for ExxonMobil, said, 'The expansion will employ the latest proprietary processes and product technologies to meet the growing global demand for specialty elastomers.'

Commenting on the project, Koos van Haasteren, executive VP, Performance Chemicals, Sabic said,'The project will help maintain an important focus on accelerating the growth and diversification of the Kingdom’s manufacturing sector.'

“The HIEI, product support center, and the Kemya elastomers facility together build a strong foundation for investments in targeted industries such as tire manufacturing, building and construction, automotive and appliances,” he added.-TradeArabia News Service