Mega Billion Dollar Project Proliferation in Cash and Resource Flush Middle East

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Researched by Industrial Info Resources (Sugar Land, Texas). If electronics engineers are used to thinking with ten digits behind the decimal point then project engineers in the Middle East think with ten or eleven digits in front of the point. The intensity and size of projects in the region is redefining the industry standards of ‘mega-project’ and ‘world class’ project. As the countries of the region race to take advantage of favorable natural resource reserves and cash income from oil sales, the density and scope of new projects, despite an environment of escalating costs, is breathtaking.

Dubai will close tender bids for the construction of the world’s largest power and water plant on June 10. The $4 billion Hassyan power and seawater desalination plant will be developed in two phases with a combined capacity of 3,000 MW of power and 200 million liters per day of desalinated water. The plant to be built at Jebel Ali, 40 kilometers from Dubai, could well exceed the $4 billion estimated cost when the successful bidder is finally confirmed.

Work has already started on the Saudi International Petrochemical Company’s (Sipchem) acetyls complex in Jubail, Saudi Arabia. Fluor (NYSE:FLR ) (Irving, Texas) has won the $1 billion contract for engineering, procurement, construction management and pre-commissioning services to the project. The project scope includes the main plant, which will manufacture acetic acid and vinyl acetate monomer, high end specialty plastic for clients and a new utilities plant. Fluor’s Calgary office will provide project management, procurement and design of the vinyl acetate monomer and utilities plants. The Greenville, South Carolina office will provide acetic acid plant design and the New Delhi office will provide detailed engineering. Six hundred fifty Fluor staff will be involved in the design and procurement work. Licensing agreements for production have been signed with Eastman Chemicals (NYSE:EMN ) (Kingsport, Tennessee) and Dupont (NYSE:DD ) (Wilmington, Delaware) and Lurgi stated construction of the carbon monoxide plant which is an integral part of the complex, in January.

Confirmation of the details of a $20 billion petrochemical complex to be built by Saudi Aramco (Riyadh) and Dow Chemical (NYSE:DOW ) (Midland,Michigan) is expected within days. The cost estimated for the proposed complex at RasTanura is said to have risen to the current $20 billion figure from an initial $15 billion. As the oil price goes and stays up, project costs go up—maybe not a virtuous circle but ‘do-able’ as the ten and eleven digit project guys say.

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