Aramco to award last Yanbu package in September

16 August 2010

Solids handling construction contract worth $350m

Contractors who bid on the last major construction package for Saudi Aramco’s estimated $9bn-plus Yanbu refinery project expect the state energy giant to award the contract in mid-September.

The engineering, procurement and construction (EPC) contract covers a solids handling unit at the 400,000 barrel a day (b/d) export refinery. The scope includes sulphur and coke handling and storage facilities and is valued at around $350m.

Sources close to the project say that around eight international engineering firms submitted final bids for the construction deal on 6 July. They had expected an award in mid-August, but now say that it will be around the end of Ramadan before the contract is finalised.

“Under the normal Aramco timeline, it should be done by now,” says one executive with close ties to the project. “It looks like it will be another month before we hear anything now.”

Companies being touted to win the deal include the UK’s Petrofac and two Italian firms, Saipem and Techint.

Bids for the contract were originally scheduled for submission in January along with the other main EPC deals, but the deadline for proposals was subsequently pushed back three times as Aramco reworked the scope of the package and contractors asked for more time.

The package is the last major contract to be awarded on the Yanbu scheme and will be another signal that Aramco intends to push ahead despite the decision by its former partner on the project, the US’ ConocoPhillips to walk away from the development in April.

Contractors and financiers say that Aramco is keen to go it alone on the scheme to capture the low prices on offer for construction contracts. The overall cost of the project may be up to 25 per cent lower than that of an almost identical scheme at Jubail on the Gulf coast, construction contracts for which were awarded in 2009, MEED research shows.

A MEED Subscription...

Subscribe or upgrade your current 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