Owning Up to Sadara’s Success

Project owners seldom set logistical standards for EPCs, but given the complexity and scale of the world’s largest petrochemical project, this unique approach was seen as necessity for success.

The US$20 billion Sadara chemical complex project under construction in Jubail Industrial City in Saudi Arabia, posed challenges unlike any other calling for a different approach, according to Ken Long, country head of energy solutions – KSA & BAH, Panalpina World Transport Saudi Arabia.

“The bigger and more complex the project, the more important coordination and communication becomes,” said Long during a panel discussion at the inaugural Breakbulk Middle East Exhibition and Conference on Tuesday. “Involving nine EPCs and a host of other sub-contractors and stakeholders the project owner therefore took the decision to play a key role in creating to as much extent as possible a standard set of logistical requirements and guidelines and to consult on these to help companies achieve it.”

Sadara is the world’s largest chemical complex ever built in a single phase, with 26 integrated world-scale manufacturing plants that will produce more than three million tons of products every year. Initiated in 2011, by the unique alliance of Saudi Aramco and The Dow Chemical Co., the plant will start producing product in the second half of 2015 with expectations of being fully operational by no later than the end of 2016.

Long said it is not uncommon for project owners to become heavily involved, as liability comes increasingly into play.

“In the case of this project though Sadara was the importer of record on almost all of the cargo and so they were from a legal perspective required to be involved in key areas such as customs clearance, import permits and acquisitions. They were carrying the risk hence the decision to be critically involved,” he said.

At the start of the project in 2011 Sadara traveled to the worldwide locations of the EPCs involved to present to them the logistical requirements and standards of the project.

“By creating this master plan they brought about an environment where a host of different stakeholders were working together as one team. This was achieved through regular meetings and individual direction by Sadara throughout the project,” Long said.

Tania Smith, material management – logistics, Fluor, said through this approach everyone involved in the project was always working towards the same goals.

“This project was extremely complex and was pulled off because stakeholders were working so closely together,” she said.

According to Jorgen Jorgensens, vice president, Biehl & Co., the Sadara approach allowed for transparency that ensured continuous communication and cooperation.

“Sadara set the tone from the very beginning and kept information flowing,” he said.

“You cannot complete a project this complex without coordination and communication and that is what Sadara achieved with their approach,” agreed Dudi Hermanto, general manager for Almajdouie.

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