South Korea's Daelim Signs Agreement with Sahara PCC and Ma'aden on Caustic Soda and Ethylene Dichloride Complex

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Researched by Industrial Info Resources (Sugar Land, Texas)--Mining and mineral-processing company Saudi Arabian Mining Company (SAU:1211) (Ma'aden) (Riyadh, Saudi Arabia) and investment company Sahara Petrochemical Company (SAU:2260) (Sahara PCC) (Riyadh) recently signed an early work agreement with South Korean engineering and construction company Daelim Industrial Company, Limited (SEO:000210) (Seoul, South Korea), under which Daelim will begin engineering and preliminary construction at the chemical project being implemented by the Arabian Chlorvinyl Company at the PCC complex in the Al-Jubail Industrial City. The Arabian Chlorvinyl Company is a 50:50 joint venture between Ma'aden and Sahara PCC.

According to Ma'aden, the agreement's commercial value is about $41 million, and the amount will cover the work implemented during the first nine months of the project. The facility is scheduled to be fully operational within the third quarter of 2012.

The chemical project includes an ethylene dichloride facility with an integrated caustic/chlorine industrial complex. The facility is set to have a production capacity of 250,000 tons of high-grade sodium hydroxide or caustic soda, and 300,000 tons of ethylene dichloride. Caustic soda and chlorine are produced during the electrolysis of brine. The chlorine is later used to manufacture ethylene dichloride. The ethylene will be delivered by pipeline from the Tasnee Ethylene Cracker, which is owned by diversified company National Industrialization Company (SAU:2060) (Tasnee) (Riyadh), which is also in the Al-Jubail Industrial City. The chemical project is being set up for export purposes.

Caustic soda is a critical feedstock used during the refining of bauxite to alumina. It is used in several other manufacturing industries, as well Pulp & Paper; soaps and detergents; textiles; drinking water; and as a drain cleaner. Ethylene dichloride is primarily used to manufacture vinyl chloride monomer, which is the major precursor for the manufacture of polyvinyl chloride.

The facility is being designed based on the manufacturing technology owned and licensed by contracting and technology company Uhde GmbH (Dortmound, Germany). The Sahara PCC-Ma'aden team signed the technology transfer agreement with Uhde in June 2007.

In December 2009, Sahara PCC announced the selection of Daelim as the project contractor. Daelim received a letter of intent to begin implementing the preliminary project work soon after the announcement. The completion of the first phase of the project will be followed by the signing of the engineering, procurement, and construction contract.

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