SK Construction Wins Basic Design Contract for Saudi PDH Plant... Contract Amount 9.3 Billion KRW

▲ A view of SK Advanced Ulsan Plant, constructed by SK Engineering & Construction and jointly operated by SK Gas and Saudi AGIC, which began commercial operation in 2016. (Provided by SK Engineering & Construction)

[Asia Economy Reporter Chunhee Lee] SK Engineering & Construction has succeeded in securing the basic engineering design (FEED) contract for a mega-scale propane dehydrogenation (PDH) plant worth 9.3 billion KRW in the Middle East.

On the 18th, SK Engineering & Construction announced that it had signed a FEED contract for the PDH plant and utility infrastructure commissioned by a joint venture (JV) between SK Gas and Saudi Arabia's AGIC. The contract amount is approximately 7.55 million USD (about 9.3 billion KRW). The two companies finalized the contract by exchanging signed documents via mail without a separate signing ceremony.

PDH is a process that removes hydrogen from propane gas to produce propylene. Propylene is subsequently polymerized into polypropylene, a polymer material used in various fields ranging from industrial materials such as pipes and automotive interior and exterior parts to everyday items like kitchenware and hygiene products.

This project involves performing the FEED for a mega-scale PDH plant with an annual production capacity of 843,000 tons of propylene and utility infrastructure at the Jubail Industrial Complex, located 600 km northeast of Riyadh, the capital of Saudi Arabia, over approximately six months.

Notably, this FEED project is significant as a joint project with SK Gas, a fellow SK Group affiliate with whom SK Engineering & Construction has continued collaboration. The two companies previously worked together on the Ulsan PDH plant project, which boasts world-class operational rates, and last year jointly participated in the Belgium PDH plant project, successfully entering the Western European PDH plant market for the first time from Korea.

AGIC, a wholly owned subsidiary of APC, is the contracting party for this project. APC, the parent company, has operated a PDH plant with an annual production capacity of 455,000 tons and a polypropylene plant with a capacity of 450,000 tons in Saudi Arabia since its establishment in 2005. In 2014, APC established SK Advanced, a joint venture with SK Gas and Kuwait PIC. They also currently co-own the Ulsan PDH plant.

Jae-Hyun Ahn, President of SK Engineering & Construction, said, "Following last year's FEED contract win for the Belgium PDH project, this achievement recognizes SK Engineering & Construction's competitiveness in PDH." He added, "We plan to successfully complete this FEED and secure a competitive edge in the global PDH sector."

This content was produced with the assistance of AI translation services.