Bidders line up for Yanbu refinery deals

27 January 2010

Contracts worth $6.6bn cover main process and storage units at plant

More than 20 international engineering firms have submitted their final bids for the contracts to build the main process and storage units at a new refinery at Yanbu.

It is one of the biggest projects expected to go ahead in the region in 2010.

The five engineering, procurement and construction (EPC) deals are worth a combined total of $6.6bn, according to regional projects tracker MEED Projects.

The deals cover the construction of a $1.2bn coker unit, a $970m crude distillation unit, $2.3bn gasoline processing facilities, a $1.2bn hydrocracker and a $900m tank farm.

The 400,000-barrel-a-day (b/d) export refinery is being developed by a joint venture of the US’ ConocoPhillips and state energy giant Saudi Aramco, and will cost up to $10bn to complete.

Six firms have bid on the coker, a processing unit which breaks oil down into gasoline products.

The bidders were Hyundai Engineering & Construction of South Korea; a Japanese/South Korean consortium of Chiyoda Corporation and Samsung Engineering; JGC Corporation, also of Japan; a consortium of China Petroleum & Chemicals Corporation (Sinopec) and Itay’s Saipem; Paris-based Technip; and Spain’s Tecnicas Reunidas (TR).

Three South Korean groups bid for the crude distillation unit, which is also used to separate oil into different fractions based on how viscous they are: GS Engineering & Construction; Samsung Engineering; and SK Engineering & Construction with Hyundai Engineering & Construction. The other bidders for that deal included Saipem with Taiwan’s China Technical Consultants; Sinopec; and Italy’s Tecnimont.

The gasoline unit also attracted bids from three South Korean firms: Daelim Corporation; GS, and Samsung. Other bidders included JGC; the Saipem/Sinopec consortium; Technip; and TR.

The contract for the hydrocracker, which uses a catalyst to turn less valuable gasoline streams into more valuable components, is being targeted by six groups: a consortium of the US’ Chicago Bridge & Iron Lummus (CBI Lummus) and the UK’s Petrofac; Chiyoda; Daelim; GS; JGC; and Technip.

Up to 12 contractors bid for the tank farm, used to store the refinery’s products. Firms prequalified to bid on the deal included the US’ ABB Lummus; CBI Lummus; Egypt’s ENPPI; Daewoo Engineering & Construction, Hanwha, Hyundai Heavy Industries, and SK, all of South Korea; India’s Larsen & Toubro; a local consortium of Petro Steel and Rotary Engineering; China’s Shanghai Wilson; and Sinopec.

The bid deadline for a sixth deal, to build a $450m solids handling plant, has been delayed until March while Aramco reworks the design, according to contractors prequalified to bid on the contract.

Western contractors say they expect firms from South Korea to make a strong showing when deals are awarded in the second quarter of 2010, as they continue to offer the lowest prices on a series of high-profile projects.

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