17-10-2012

JGC subsidiary awarded ethylene facility expansion project in Saudi Arabia

JGC Corporation announced today that its wholly-owned Saudi Arabian subsidiary, JGC Gulf International Co., Ltd. (JGC Gulf), has been awarded a contract for expansion of ethylene manufacturing facilities for the Rabigh Phase II Project.  The contract was awarded by client Saudi Aramco and Sumitomo Chemical Company.

The lump-sum turnkey contract calls for the engineering, procurement, and construction (EPC) services associated with an expansion of the ethylene manufacturing facilities in Rabigh, Saudi Arabia. The expanded facilities will have a capacity of 300 thousand tons per year of ethylene, and are scheduled to be completed in 2015.

As worldwide demand for petrochemicals rises, Rabigh Refining and Petrochemical Company, a joint venture between Saudi Aramco and Sumitomo Chemical, has been operating an integrated refining and petrochemicals complex (the Rabigh I Project) in Rabigh, Saudi Arabia.  In parallel, Saudi Aramco and Sumitomo Chemical have been conducting a feasibility study for the Rabigh Phase II Project, to expand the original complex. The ethylene manufacturing facility that JGC Gulf will be expanding has a capacity of 1.3 million tons per year, and was constructed by JGC Yokohama and completed in 2008 as a part of the Rabigh I project. The ethylene facility makes up one of the core facilities of the complex, with a vital function as the upstream producer of base chemicals used for synthesis of many other chemical products downstream.

The Rabigh Phase II project is of vital importance to Sumitomo Chemical and Saudi Aramco, and JGC is providing project management services for the feasibility study phase of the project. Therefore, JGC is delighted to have its wholly-owned subsidiary participate in the EPC phase of the project.

In recent years, Saudi Arabia has introduced comprehensive policies to diversify national industry and raise the national employment rate.  In light of this, JGC established an EPC subsidiary in Saudi Arabia in 2008, ahead of other major Japanese engineering contractors, and since then has built up a strong performance record of projects that address local needs. For the Rabigh Phase II Project, it was the client's earnest wish that bidders be able to conduct engineering, procurement and construction work on Saudi soil. JGC Gulf was selected for this contract award due to its project execution abilities and performance record in the Kingdom of Saudi Arabia, as well as its cost-competitiveness. Furthermore, since JGC Gulf will be able to conduct all EPC work within the Kingdom, the Rabigh Phase II Project holds enormous value in bringing JGC's globalization initiative directly in line with the Kingdom's initiatives to strengthen domestic industry, making the project strategically advantageous for both parties.

Currently, JGC has been working toward the goal of strengthening and expanding its overseas EPC subsidiaries, as laid out in its current medium-term management plan, "New Horizon 2015." By participating in the Rabigh Phase II Project, JGC Gulf is expected to be able to further improve its project execution abilities.