Riyadh – Mubasher: Advanced Petrochemical Company on Sunday announced awarding an engineering, procurement, and construction (EPC) deal for the construction of a propylene plant in Ulsan, South Korea.
The EPC contract follows a previous announcement made on 24 June, when Advanced Petrochemical’s subsidiary SK Advanced Company Ltd signed a joint venture (JV) agreement with PolyMirae to establish the JV known as Ulsan PP Co. Ltd (JV Co.).
Under the deal, JV Co. along with SK Engineering & Construction Co., Ltd will build a 400,000-metric tonne (MT) per year propylene production facility, the firm said in a statement to the Saudi Stock Exchange (Tadawul).
The EPC deal amounts to 406.8 billion Korean won ($350.6 million), Advanced Petrochemical revealed, noting that construction works will begin in the first quarter of 2018, while operations are expected to being in the first half of 2021.
“This EPC Contract is considered as a contract with a related party as it entered into with SK Engineering & Construction Co., an affiliate of SK Gas Co., Ltd. which owns a 45% stake in SK Advanced Company Ltd,” the Saudi petrochemical firm added.
Advanced Petrochemical’s new polypropylene plant is set to be one of the largest polypropylene plants in Asia. It will use “LyondellBasell's industry-leading Spheripol technology,” according to the Saudi chemicals maker.
Polypropylene manufactured at the new South Korean facility will be sold to customers within the Asian nation and exported throughout Asia and the world to be used in automotive components, injection moulding, blow moulding and packaging film.
“Some of the polypropylene will also be sold to compounding companies in South Korea and the broader region,” the statement showed.
Advanced Petrochemical last posted a 1.7% year-on-year fall decrease in profits to SAR 218.08 million ($58.14 million) in Q3-18 from SAR 221.95 million ($59.17 million), whereas in the first nine months of 2018, the firm’s profits grew by 5% to SAR 614.36 million from SAR 585.33 million in the prior year period.
By 10:45 am Saudi time, Advanced Petrochemical’s stock fell 1.50% to SAR 52.50.
