--Saipem wins turnkey job for Safco's fifth fertilizer plant
--Project is part of Safco's expansion plans at Jubail
--Safco says plant's commercial start-up due in 3Q 2014
(Recasts. Adds details, background throughout.)
By Oliver Klaus
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Saudi Arabia Fertilizers Co. (2020.SA),
or Safco, Thursday said it had awarded to Italy's Saipem S.p.A.
(SPM.MI) a 2 billion Saudi riyal ($533 million) contract to build a
fifth, large-scale fertilizer plant as part of expansion plans at
its existing site in Jubail on Saudi Arabia's east coast.
Under the turnkey engineering design, supply and construction
contract, Saipem will build Safco's fifth fertilizer plant with
annual capacity to produce 1.1 million tons of urea, the company
said in an emailed statement.
The project will strengthen Safco's operational and performance
reliability and help it boost its competitiveness in the global
chemical fertilizers industry, the company, an affiliate of
petrochemical giant Saudi Basic Industries Corp. (2010.SA),
said.
Construction is due to take 26 months starting Dec. 6, with
commercial start-up scheduled for the third quarter 2014, it
added.
Regional and international companies are targeting the
fertilizer and petrochemical sectors in the Persian Gulf for
investments due to the wide availability of cheap natural gas, a
commonly used feedstock in the industry. The Safco fertilizer
complex is one of the largest in the world.
Safco will utilize its own resources to finance the project,
Sabic chief executive officer and Safco chairman Mohamed Al Mady
said in the statement.
The company in October announced that its third-quarter net
profit doubled year on year to SAR1.21 billion on the back of
higher product prices internationally. Last month, Safco's board of
directors recommended paying a dividend of SAR7 a share for the
second half of this year.
Safco's shares Wednesday closed flat at SAR181 on the Riyadh
bourse, which is closed Thursdays for the weekend.
-By Oliver Klaus, Dow Jones Newswires; +9714 446-1693;
oliver.klaus@dowjones.com
Copyright (c) 2011 Dow Jones & Co.