Aramco invites bids for Jubail export refinery contracts

04 July 2008
Saudi Aramco has issued bid invitations to companies shortlisted for engineering, procurement and construction contracts to build the 400,000-barrel-a-day (b/d) export refinery at Jubail.

The state-run oil giant and its joint venture partner, France’s Total, issued the invitations in the first week of July for the five main construction packages and four additional contracts.

The two partners drew up a shortlist of prequalifiers for the packages in June.

The five main construction packages are worth an estimated $6bn, while the four further contracts are valued at $2.96bn in total (MEED 20:6:08).

Contractors expect awards to be made in the first quarter of 2009. Companies are expected to bid for the work on a traditional lump-sum turnkey basis, where the contractor carries almost all the project risk.

The development comes amid continuing concerns that costs on the refinery could come in over budget. Earlier this year, French energy contractor Technip, which is carrying out the front-end engineering and design on the plant, confirmed that costs were likely to reach more than $10bn (MEED 18:4:08).

But some companies are now predicting the figure could reach $12bn, double the initial $6bn budget.

“Judging by similar projects, it will come in close to $12bn because of the increasing cost of raw materials and the shortage of engineering resources worldwide,” says one source close to the project.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications