Sipchem awards USD169 mln EPC contract for Jubail PDH/PP capacity hike

Sahara International Petrochemical Co. (Sipchem) awarded engineering, procurement and construction (EPC) contracts for the expansion of the PDH-PP plant related to the subsidiary, Al Waha Petrochemical Co. for USD169 million (SAR 634 million), said Argaam.

The 28-month contracts were awarded to SGC E&C Co. Ltd. and SGC Arabia Co. Ltd. on Aug. 26, Sipchem said in a statement to Tadawul.

These EPC contracts entailed increasing the total production capacity, as the additional capacity of propylene stands at 72,000 tons and polypropylene at 150,000 tons. After expansion, the total capacity of propylene and polypropylene will reach 537,000 tons and 600,000 tons, respectively.

The relevant financial impact will appear after the project is completed by Q4 2026, the statement added. This project reflects Sipchem's ongoing efforts to enhance its production capacity and efficiency.

The increase in polypropylene production will significantly contribute to many industries, including automotive, fibers and food packaging films. Such an expansion will boost the company's market position as well as its growth strategy.

Any significant material developments related to this project will be announced in accordance with relevant regulations.

We remind, Saudi International Petrochemical Company (Sipchem) has awarded a USD189 million contract to a South Korean contractor to build a new petrochemicals facility in Saudi Arabia. The project was won by SGC Engineering & Construction, an engineering, procurement and construction contractor, The Korean Economic Daily, a financial news outlet, reported. The deal involves the construction of an ethylene-vinyl acetate plant in Jubail Industrial City.

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Enviro-tech startup Samsara Eco Ltd. (Sydney) and Israeli textiles producer NILIT have announced plans to potentially invest in a nylon-6,6 textile recycling project in Southeast Asia, said Chemweek.

A specific location, investment amount and processing capacity for the proposed facility were not given.

The companies said the plant is aimed at being operational by late 2026 and would be capable of recycling waste nylon-6,6 textiles into circular nylon polymers for textile brands and manufacturers to reuse in their existing supply chains.

Samsara and NILIT have signed a memorandum of understanding to study the potential pilot recycling facility, they said in a joint statement.

About 4 million metric tons of nylon-6,6 is manufactured annually, with the fiber “notoriously difficult to recycle,” they said.

Samsara Eco has developed a patented enzymatic process for the recycling of waste plastics, including nylon-6,6, it said.

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Linde PLC (Woking, UK) has announced it will invest more than $2 billion to build, own and operate an integrated clean hydrogen and atmospheric gases facility in Alberta, Canada, to supply clean hydrogen to Dow Inc.’s USD6.5 billion Fort Saskatchewan Path2Zero ethylene project.

Linde’s new complex — expected to be completed in 2028 — will capture and sequester more than 2 million metric tons per year (MMt/y) of CO2. The facility will utilize autothermal reforming as well as carbon capture to produce clean hydrogen and will also recover hydrogen contained in off-gases from Dow’s ethylene cracker, the company said.

Dow’s integrated net-zero ethylene cracker and derivatives site is expected to be the first of its kind and will produce net-zero Scope 1 and 2 greenhouse gas emissions, the company said. The initial phase of Dow’s project will add approximately 1.28 MMt/y of ethylene and polyethylene capacity. The second phase, scheduled to start in 2029, will add a further 600,000 metric tons per year.

Last December, Linde CEO Sanjiv Lamba said that Linde “will be providing hydrogen for their crackers, both existing and [the] expansion that they are doing.”

Earlier this year, Dow completed a USD1.25 billion green bond offering, which will help fund the Fort Saskatchewan net-zero cracker. The bonds are being issued in two tranches: one $600 million tranche that will mature in 2034 and carry an interest rate of 5.15%, and a USD650 million tranche that will mature in 2054 and carry an interest rate of 5.60%.

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India's Ministry of Chemicals and Fertilizers has delayed the official implementation of its quality controls on polyvinyl chloride homopolymers imports by four months to Dec. 24, according to a government order issued in the Gazette of India on Aug. 23.

The government announced in February that all suppliers intending to ship PVC into India must be certified by the Bureau of Indian Standards. The policy was originally set to take effect Aug. 26, but the Department of Chemicals and Petrochemicals pushed back the effective date likely in a bid to buy more time to award certificates to more firms, sources said.

The delay was expected by many market participants, with sources saying it was necessary to prevent a PVC supply crunch in the country.

"We do not have enough domestic supply to meet our PVC demand, and many suppliers [have] yet to receive the BIS certification," a South Asian trade source.

India's polyvinyl chloride imports stood at 3.1 million metric tons in 2023, up 40% year on year, according to Indian Customs data. China, the region's largest PVC exporter, accounted for around 40% of India's 2023 PVC imports.

The implementation of BIS norms could thus change PVC trade flows, as Chinese producers were last heard either having not applied for or unable to secure the BIS certification.

Industry sources said the application process for Chinese exporters might not be as smooth as for their other Northeast Asian counterparts, given political tensions between the countries and a previous influx of Chinese materials that was seen to be subduing Indian PVC values.

Over 40 companies have applied so far, with BIS certifying exporters from South Korea, Taiwan and Thailand, sources said.

Asian initial offers for September's cargoes were also reportedly hinging upon the outcome of this long-awaited announcement, where market participants are now firmer than ever in their beliefs that Asian PVC prices will be driven down.

"Taiwanese majors' September fresh offers will plunge tomorrow, there's finally something going on with the PVC market," a China-based trade source said.

Other market participants found that the delay in BIS certification implementation could drive down initial offers as it necessarily provides Chinese exporters more time to export cargoes into India in a bid to maximize sales, thereby buoying regional supply and exerting downward pressure on prices.

"There will soon be temporary anti-dumping duties," the Chinese trade source added. PVC prices in India have dropped significantly in recent weeks due to normalizing freight rates and sluggish demand during the ongoing monsoon season.

The Platts-assessed CFR India PVC price was stable in the week to Aug. 21 amid unchanged market fundamentals, following a $20/t drop a week before that had dragged the PVC India rate to a three-month low.

Meanwhile, the CFR China PVC price plunged $55/t week on week to $740/t at the Aug. 21 Asian close, reflecting bearish market fundamentals and China's weak property sector.

Earlier, it was reported that India would reduce import duties on methylene diphenyl diisocyanate (MDI) to 5%. At the same time, the customs duty on flexible polyvinyl chloride (PVC) films would be increased from the current 10% to 25%. It is also planned to increase the import duty on ammonium nitrate from 7.5% to 10%.

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PPG Industries Inc. announced the completion of upgrades that have expanded the capacity of its Yen Phong industrial coatings plant in B?c Ninh province, Vietnam, said the company.

The enhancements include a new production line dedicated to waterborne decorative and functional coatings for consumer electronics, as well as testing equipment and automated spray booths.

The upgraded plant, now equipped with six production lines, aims to reduce turnaround times, accelerate coatings development and expand access to PPG’s technical and customer support.

The company said that the investment supports the demand for products from multinational consumer electronics brands operating in Southeast Asia.

The facility also produces liquid coatings for transportation applications, coil and extrusion coatings for architectural and building products, and ultraviolet-curable coatings for electronic materials.

We remind, Until mid-2022, the main supplier of paints and varnishes for the Togliatti enterprise AvtoVAZ was PPG. However, it left Russia last spring. For some time, the automaker lived off old stocks, but at the same time looked for new suppliers to fully replace the supplies of the previous partner.

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