Japanese contractor expected to negotiate directly over offsites and utilities at Ras Tanura expansion project
Japans JGC Corporation is the sole bidder for the offsites and utilities package at the $3bn Ras Tanura refinery clean fuels and aromatics project in the Eastern Province of Saudi Arabia.
The Japanese contractor was the only engineering, procurement and construction (EPC) contractor to offer a submission to Aramco and it is now expected to enter into a direct negotiation with the state-owned oil major.
There has been a few contractors who have declined to bid, due to the complexity of the package, says an oil and gas executive based in Saudi Arabia. It is unusual for Aramco to only have one contractor submit, but it has a long relationship with JGC and it is likely it will come to some agreement.
There are two remaining packages on the Ras Tanura rehabilitation and expansion. They are:
- Naphtha and aromatics processing facilities
- Paraxylene production facilities
Contractors have until 20 October to submit bids for the technical packages. Both are being released on an out-of-kingdom (OOK) and in-kingdom (IK) basis and contractors have been instructed to submit documents for OOK and IK.
Another package for the site preparation has been incorporated into the three remaining schemes and will not be tendered as a standalone parcel of work.
Awards are expected in the first quarter of 2014 and the construction phase is set to last 42 months. Start-up is expected for mid-2017.
The US Jacobs Engineering is carrying out the front-end engineering and design (feed) and the original scope amounted to about 400,000 man-hours in total. This figure has since risen considerably. The initial budget of about $2bn is expected to climb to about $3bn.
The scope of works will include carrying out feed services for the inside and outside battery limits, as well as modifications to the refinery to ensure it meets environmental regulations. An aromatics cracker will also be added, which will allow for a far-greater diversity of products being manufactured at the plant.
The Ras Tanura refinery is fully owned by Saudi Aramco and is the largest oil facility in Saudi Arabia, with a capacity of 550,000 barrels a day (b/d). The state-owned oil company is currently upgrading its domestic refining capacity to both lower the sulphur content of its downstream output and diversify the amount of refined products it produces.