FACTS & FIGURES - Tecnimont ICB

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7 CHEMICALS & PETROCHEMICALS 2008 will be remembered as a peak year for engineering and construction in the cycle that started in 2005. The first six months saw the completion of several large-scale projects, mainly in the Middle East and Asia, which contributed to a significant growth in world production capacity. The increasing oversupply was then compounded by a downturn in the world economic cycle. Several leading chemical producers found themselves in financial difficulties. In a few cases, restructuring plans were announced and new investments postponed. Even companies that were less severely affected have delayed their investments in order to benefit from the expected reduction in material costs. Current expectations in the industry are for a period of consolidation. However, the longer-term outlook indicates that production will continue to migrate from areas such as North America and Europe towards the Middle East and Asia, which have lower production costs. Despite the economic difficulties, Maire Tecnimont has maintained its market share and leadership position in polyolefins, and we continue to see interesting new opportunities, particularly in the Gulf Cooperation Council (GCC) countries. The Group has also started to diversify into new business areas and new markets. We have formed strategic alliances with important technology providers in fertilizers, synthetic rubber/elastomers and aromatics derivatives. In addition, new joint ventures with local partners will facilitate access to the North African market, where significant investments are planned in coming years. 40 41
Middle East and Mediterranean Area: Consolidated Leadership and New Opportunities The Middle East and North Africa (MENA) is the world’s most influential oil and gas region, accounting for two-thirds of the world’s proven oil and about 45% of its proven natural gas reserves. Thanks to new discoveries and the introduction of advanced exploration and production techniques, the region's oil wealth has grown solidly for the past two decades. The GCC countries have traditionally been the main players in the region, but North African countries have grown in prominence recently. Maire Tecnimont has been active in MENA since the investment boom of the eighties. The Group’s presence has increased significantly in the last few years and we have become a leading engineering and construction player, especially in the petrochemicals sector. Maire Tecnimont has won contracts worth more than US$4.5 billion in the investment boom in Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Bahrain. In 2008 Engineering News-Record, the leading US journal for the E&C industry, ranked the Group as the 10th largest engineering contractor in the Middle East. Maire Tecnimont has also grown in stature and reputation in Egypt, Libya, and other North African countries. Maire Tecnimont is present in MENA with branch and representative offices in Abu Dhabi (UAE), Kuwait, Qatar, Tehran (Iran), Tripoli (Libya), and a wholly owned subsidiary, Tecnimont Arabia Ltd, in Jeddah (Saudi Arabia). In 2008, more than 50% of Group revenues came from this area. MENA is increasingly attracting investment from leading international petrochemical producers because of its abundant hydrocarbon resources and favourable geographical position bridging East and West. Rabigh, Kingdom of Saudi Arabia At a cost of more than US$9 billion, the client is building one of the world’s largest integrated refinery and petrochemical complexes at Rabigh on the Red Sea, about 160 km from Jeddah. Our contract, awarded in 2006, is for the construction of the polyolefins units. The Petro Rabigh project marks the entry of Aramco into the downstream petrochemicals industry, as well as the first large investment by Sumitomo Chemical in Saudi Arabia. The Tecnimont-led consortium completed the project and handed it over to the client at the end of November 2008. For Tecnimont, it was an important achievement because of its size and diversification of technology, and also because of the business relationships forged with two prestigious new clients, Aramco and Sumitomo Chemical. In November 2008, the jury named the Rabigh project the prize winner at the 2008 International Project Management Association (IPMA) International Project Excellence Award meeting in Rome. Contract type: EPC lump-sum Client: Petro Rabigh, a jv of Sumitomo Chemical Co. (Japan) and Aramco (Saudi Arabia) Contractor: A consortium of Tecnimont (leader) and Sumitomo Chemical Engineering Co. (Japan) for offshore activities; a consortium of Tecnimont Arabia and AICO (Saudi Arabia) for onshore activities Contract value: US$1,200 million (Tecnimont share 60%) Capacity and two PP lines, each of 350,000 technology: tonnes/year; 250,000 tonnes/year EPPE; 350,000 tonnes/year LLDPE; 300,000 tonnes/year HDPE (all using Sumitomo technology, with the exception of a LyondellBasell Hostalen HDPE unit); 50,000 tonnes/year of polymer-grade butene-1 (Axens technology) Contract type: EPC lump-sum Client: Saudi Ethylene and Polyethylene Company (SEPC) – a jv of Tasnee Petrochemical (45.3%), LyondellBasell (25%), Sahara Co. (24.4%) and GOSI (5.3%) Contractor: Tecnimont Contract value: ¤525 million Capacity and 400,000 tonnes/year HDPE technology: (LyondellBasell Hostalen technology); 400,000 tonnes/year LDPE (LyondellBasell Lupotech T technology) Contract type: EPC lump-sum Client: Borouge, a jv of Abu Dhabi National Oil Co. and Borealis Contractor: Tecnimont Contract value: US$1,900 million Capacity and two PP lines, each of 400,000 technology: tonnes/year; 540,000 tonnes/year PE (Borealis Borstar technology for both products) Tasnee, Al Jubail, Kingdom of Saudi Arabia The client is setting up a large petrochemical complex costing about US$2.4 billion at Al Jubail. In 2006 Tecnimont won a contract for the construction of HDPE and LDPE plants with a total capacity of 800,000 tonnes/year, the largest in the world to be based on the LyondellBasell Hostalen and Lupotech T processes. The complex is centred on a large ethylene plant supplied by another contractor. Thanks to its experience in polymers, its excellent relationship with LyondellBasell and its knowledge of the Saudi Arabian market, Tecnimont was selected by Tasnee in a negotiated open-book, cost-estimate approach, which was then converted into a lump-sum contract. The HDPE plant was handed over to the client and successfully started production in November 2008. The LDPE unit began production in early 2009. The project was financed by a mix of equity and loans. Credits were arranged by HSBC as the lead bank, with the support of SACE, KEXIM and KEIC for export guarantees and insurance-covered loans. Borouge 2, Ruwais, Abu Dhabi, United Arab Emirates The Borouge 2 project, awarded to Tecnimont in April 2007, calls for the construction of three polyolefins units, together with associated materials handling facilities, laboratories and marine installations. One of the largest integrated petrochemical complexes ever awarded on an EPC lump-sum basis, it is also the largest contract in Tecnimont’s history. The project is on schedule, with about 87% of the engineering completed by the end of December 2008. Purchase orders placed covered about 85% of the equipment and materials, and approximately 50% of the materials had already been delivered to the site. Ten million man-hours had been spent on construction, which was 40% complete at the end of 2008. The marine facilities were finished on schedule and the whole project should be completed by the second half of 2010. The excellent long-term relationship with Borouge contributed greatly to the project’s success and will further strengthen Maire Tecnimont’s hand in bidding for a large new petrochemicals expansion (Borouge 3), contracts for which will probably be announced in 2009/2010. In December 2007 Borouge gave Tecnimont another contract, worth approximately US$28 million, to expand the PE1 line it installed in 2001. Key success factors here were Tecnimont’s excellent performance in the Borouge 1 project, its successful revamping of the PE2 line in 2004, and its ongoing performance in the Borouge 2 expansion. The project was completed on schedule in February 2009. 42 43
Page 1 and 2: FACTS & FIGURES 2008
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Page 5 and 6: 1 CHAIRMAN’S STATEMENT Dear Share
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Page 15 and 16: Table A Maire Tecnimont Safety 2008
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Page 23: Main Licensors - Polymers, Chemical
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