Saudi Aramco and the US’ Dow Chemical hope to sign a land lease for their newly relocated joint venture petrochemicals project at Jubail by the end of June, and want to award the main construction contracts for the scheme by the end of 2011.

The pair are in final talks with the Royal Commission for Jubail over the lease for land at its Jubail Industrial City 2 and hope to complete the deal within a month, say sources close to the project.

“All the details have been sorted out, they just need to finalise the deal with the Royal Commission, and they can finalised the design work,” says one executive with close ties to the project.

Once the lease has been signed, the partners will start prequalifying contractors to bid on a site preparation contract, which it will formally tender in October and hopes to award before the end of the year.

Front end engineering and design (Feed) studies for the redesigned and relocated project are scheduled for completion by December, and contractors in talks with the partners say that they expect to be prequalified to bid on the main engineering, procurement and construction (EPC) contracts on the scheme by the end of the first quarter of 2011.

A formal invitation to bid on these deals has been tentatively scheduled for either March or April 2011 and the partners want to award them by either September or October of the same year.

MEED reported in March that Dow and Aramco were considering moving the planned petrochemicals complex from Ras Tanura to Jubail because of issues related to the original sites and cost savings, which could be realised by building it at Jubail and integrating it into a joint venture refinery being developed by Aramco and France’s Total (MEED16:3:2010).

In April, executives confirmed that the project was being moved, adding that the scope of the scheme was being reduced to realise further savings. The partners are currently considering building only 25-27 production units rather than the original 35. The cost of the complex has been reduced from $17bn-plus to less than $15bn, sources say.

The decision to move the complex led to changes to more than $30bn of Aramco schemes, including the cancellation of plans to build a 400,000 barrel a day (b/d) expansion to the existing 500,000 b/d Ras Tanura refinery (MEED 19:4:2010).