Bidders push for more time to price Ruwais process units

21 August 2009

Firms say September deadline is too soon given fluctuating materials costs.

Contractors are calling on Abu Dhabi Oil Refining Company (Takreer) for more time to prepare financial bids for two $2bn-plus deals to build process units at the company’s new Ruwais refinery.

Takreer has told the firms they must provide commercial bids outlining cost structures by the end of September.

However, contractors tell MEED they need more time to speak to subcontractors and analyse the costs involved, given the volatility in commodity prices this year.

UAE refining capacity, 2008-14
Capacity (thousand barrels)
Existing capacity673673
Ruwais capacity0400
Source: MEED, MEED Projects-CMI  

Oil prices have rebounded to nearly $70 a barrel from lows of about $30 a barrel in February.

At least eight firms submitted technical proposals to Takreer for the two engineering, procurement, and construction (EPC) deals on 18 August. The first package covers the construction of a crude distillation unit at the 400,000-barrel-a-day refinery. Bidders include South Korea’s SK Engineering & Construction, Italy’s Tecnimont, Spain’s TR, and Japan’s Toyo Engineering Corporation.

Among the bidders for package two, which covers a residue fluid-cracking unit and associated downstream units, are South Korea’s GS Engineering and France’s Technip, alongside Japan’s Chiyoda Corporation and JGC Corporation.

“We really need some more time to look at the data for the project and consult our suppliers and subcontractors,” says a senior executive at one bidding firm.

“With all the ups and downs on material costs that we have seen recently, and with so many projects being put through, it is important to get things right on such a large proposal.”

This year, Abu Dhabi has been one of the most active project markets in the world for construction firms working in the oil and gas sector. The emirate plans to award more than $28bn worth of deals between March 2009 and March 2010 as it pushes to hit ambitious targets to produce, process and distribute 3.5 million barrels a day of oil by 2019.

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