Contractors vie for Saudi Aramco clean fuels contract

21 August 2009

Aramco approaches firms to bid for deal to build ultra-low-sulphur diesel unit at its Jubail refinery.

State-run oil company Saudi Aramco and the UK/Dutch Shell Group are launching the second phase of a long-term plan to cut the sulphur content of petrol produced at the country’s four biggest oil refineries.

Aramco and Shell have approached contractors to bid for the engineering, procurement and construction (EPC) deal to build an ultra-low-sulphur diesel unit at the Jubail-based refinery that they operate through their joint venture Saudi Aramco Shell Refinery Company (Sasref).

The refinery, which is supplied with Arabian Light crude from Aramco, produces 305,000 barrels a day (b/d) of petrol.

Aramco is inviting France’s Technip, the US’ CBI Lummus and Foster Wheeler, Italy’s Snamprogetti, Toyo Engineering Corporation, JGC Corporation and Chiyoda Corporation of Japan, and South Korea’s Samsung Engineering to bid for the EPC contract. The bid deadline is the middle of October and the date for the completion of the ultra-low-sulphur diesel unit is the third quarter of 2011.

The project covers the construction of a diesel hydrocracker, a hydrogen processing unit, sulphur recovery and sour water treatment units, reactors, separators and related facilities.

Clean Fuels Programme
Sulphur content of Saudi petrol in the 1970s10,000 ppm
Sulphur content of Saudi petrol in the 1980s5,000 ppm
Target for sulphur content of petrol by 2013 10 ppm
ppm=parts per million. Source: MEED

One Al-Khobar-based con-tractor close to the project tells MEED Sasref issued invitations to bid for the deal to international contractors in the second week of August. “The move is in line with Aramco’s desire to negotiate the cheapest possible bids on its refinery programmes,” says the contractor.

US-based CBI Lummus, which has completed a front-end engineering and design (Feed) study for the ultra-low sulphur diesel unit, was originally in line to complete the EPC phase. However, Aramco has now opened the construction phase to selected international contractors.

Sasref originally planned to build a new aromatics complex as part of its project to produce cleaner petrol, but dropped the idea in 2006 (MEED 23:6:06).

The Sasref EPC tender follows Saudi Aramco Mobil Refinery Company’s (Samref) decision in April to award a $400m contract to Australia’s WorleyParsons to cut the sulphur content of the gasoline produced at its 400,000-b/d Yanbu refinery.

Aramco also plans to roll out new ultra-low-sulphur diesel facilities at its Riyadh and Jeddah refineries by 2012.

Aramco embarked on the multi-billion-dollar scheme to reduce sulphur content to meet US environmental regulations on petrol imports that come into force in 2013 (MEED 28:3:08).

Gulf states have progressively introduced changes to sulphur levels over the past few years as the region slowly moves into line with the US’ tough new limits on sulphur dioxide emissions.

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