Saudi Chevron Phillips (SCP) is proceeding with its National Chevron Phillips (NCP) petrochemical project in Jubail, but with changes to its corporate structuring and amendments to its scope, MEES understands. The cost has risen to $5bn from the originally estimated $4.3bn, but the new plans omit an electricity co-generation facility which would have cost around $400mn, and will possibly see the elimination of two other units. The project now entails construction of units for ethylene (1.15mn tons/year), polyethylene (1.1mn t/y), polypropylene (400,000 t/y), and 1-hexane (100,000 t/y), while those for metathesis (200,000 t/y) and polystyrene (200,000 t/y) may be excluded, subject to evaluations.
Under an agreement to receive gas feedstock for NCP from the Ministry of Petroleum, the 50:50 joint venture SCP and NCP owners, Chevron Phillips Chemical Company and Saudi Industrial Investment Group (SIIG), will change their holding structure in NCP. A new joint stock company will be formed, 50% owned by SIIG and other investors, and 50% by the public, via an IPO. This joint stock company will then hold 65% of a limited liability company, with Chevron Phillips holding the remaining 35%. In addition to these changes, the project sponsors have also pledged to build a separate plant in Jubail to produce nylon 66. These directives, to be implemented within a two-year timeframe, are part of government plans to boost downstream products, and increase public investment opportunities. Chevron Phillips does not own technology for nylon 66 production, so will need to seek a joint venture partner.
The company still plans to approach the bank market in the third quarter to secure financing for NCP, although with the recent changes this goal may slip. The project will include an equity contribution of 25%, with the Public Investment Fund (PIF) providing around 30%, and the Saudi Industrial Development Fund about SR800mn ($213mn), plus a commercial bank tranche sized at roughly $2.1bn (including $600mn from US Exim MEES , 5 February). Banks were invited to project roadshows in January (MEES , 8 January). The NCP project was originally expected to approach banks late last year, but experienced administrative delays (MEES , 23 October 2006). Meanwhile, Jubail Chevron Phillips (JCP) styrene monomer complex is over 65% completed. It will produce 700,000 t/y of styrene, 250,000 t/y of propylene and 400,000 t/y of aromatic gasoline. JCP is owned by Chevron Phillips and SIIG.
