Technip lands contract for Saudi petchems plant

Last year, Technip reported a 14 per cent increase in revenue to €12.2 billion. Simon Dawson / Bloomberg

The French contractor Technip has been awarded a contract to provide engineering and equipment for an ethylene cracking furnace at a petrochemicals plant in Saudi Arabia.

The contract is from CTCI, a Taipei-based EPC company with annual revenues of 7.6 billion Taiwanese dollars (Dh859.6m). CTCI won a US$94.5m contract from Saudi Kayan in February to build the cracker in Jubail Industrial City in the kingdom’s Eastern Province.

Saudi Kayan is looking to boost capacity at the plant to produce 93,000 tonnes of ethylene a year.

Technip said that it would use proprietary furnace technology that offers high-capacity gas cracking capability. The work will be carried out at Technip’s unit at Milton Keynes in the UK.

Stan Knez, the president of Stone & Webster — a process technology business acquired by Technip in 2012, said: “As the largest ethylene licenser and contractor, Technip is pleased that our furnace technology was selected for this important ethylene expansion project.

“The technology has an outstanding track record with more than 60 installations for gas cracking in the last decade.”

The project will be completed in the second half of next year.

Last year, Technip reported a 14 per cent increase in revenue to €12.2bn, but net profit plunged by 90 per cent to €45.1m, mainly due to restructuring costs.

Saudi Kayan is a shareholder in the $20bn Sadara Chemical Complex, which is being built in Jubail Industrial City. Work on the project, which is the biggest chemical complex to be built in a single phase, is almost complete. It has been created to help diversify the kingdom’s economy.

Chemicals produced at Sadara will feed a new, 12 square kilometre industrial park, PlasChem Park, where a range of products from paints and coatings to pharmaceuticals, soaps and plastic packaging will be produced. According to the Deloitte Powers of Construction report on Wednesday, of the region’s $5 trillion worth of projects in the “pre-execution” phase – that is construction work that is yet to start – 5.5 per cent are in the chemicals market.

Cynthia Corby, the leader of Deloitte’s Middle East construction team, said that despite a 14 per cent decline in anticipated contract awards this year to $160bn, governments still “need to diversify income streams and prioritise their spending”.

Follow The National's Business section on Twitter