Contractors have named South Korea’s Daelim Industrial as the favourite to win the $1.2bn hydrocracker construction deal on Saudi Aramco’s Yanbu refinery project, replacing previous favourite GS Engineering & Construction.

Daelim is also the favourite to win the $2.3bn engineering, procurement and construction (EPC) contract to build the main gasoline processing facilities at the new plant. Aramco plans to award the six main construction contracts for the refinery before the end of July (MEED 20:7:2010).

In March, Aramco selected GS as their preferred bidder on the hydrocracker unit, but sources say that Daelim was able to offer a more attractive price for the deal in subsequent discussions over costs.

“They have gone very aggressively for it,” says a source at one contractor bidding on the project. “I think we will see them win both packages next week.”

Earlier in July, Aramco decided to build the refinery by itself. The state energy giant tells MEED that it has formed a new company, Red Sea Refining Company, to execute the project.

US energy major ConocoPhillips quit as a partner in the project in April, citing changes in its development strategy. Aramco will still use Conoco’s technology for the refinery, sources close to the project say.