KBR and Foster Wheeler frontrunners for $7bn Jizan refinery

25 January 2011

US contractors likely to win the feed and PMC contract for Aramco refinery project

Saudi Aramco has shortlisted the US’ Foster Wheeler and KBR for the front end-engineering and design (feed) and project management consultancy (PMC) contract at the $7bn Jizan refinery in Saudi Arabia.

In-kingdom contracting sources familiar with the deal say a decision on the contract is imminent and that it is now down to just two contractors.

“It is down to Foster Wheeler and KBR now,” says an in-kingdom contracting source. “I think that Foster Wheeler is the slight favourite, but it is very close and could still go either way.”

The scope of works for the successful contractor will include the design of a 400,000 barrel-a-day hydroskimming refinery, with an associated marine terminal. As part of the project-managing package, the contractor will also be involved in tendering out and supervising the construction contracts.

Aramco exports, by region
Region Percentage
Far East50.6
Source: Saudi Aramco 

Both frontrunners are expected to carry out the design work in the UK if successful. KBR has an office in London that will handle the work, while Foster Wheeler will execute the design work from its Reading office.

“This is quite a surprise,” says a source close to the project. “I was initially led to believe that at least some of the work would be carried out in Houston, but that now doesn’t seem to be the case.”

It was originally thought that the work would be carried out totally in-kingdom as part of the general engineering services plus (GES plus) contract that was due to be signed by Saudi Aramco and up to seven engineering contractors in November (MEED 29:11:10).

However, no agreement has yet been reached between Aramco and the contractors involved in GES plus, so a more conventional approach to the Jizan feed has been adopted.

The Jizan project was initially planned to become the first independent oil refinery in the kingdom. However, due to only two bids being submitted, Aramco took over management of the development in February 2010.

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