Saudi Aramco Lubricating Oil Refining Company (Luberef) has released the tender for the engineering, procurement and construction (EPC) contracts for its $1bn expansion project in May.

The prequalification of contractors has now been completed and the tenders have been released a month earlier than initially scheduled.

The eight contractors prequalified to bid for the Luberef contract are:

• Chiyoda Corporation/CTCI (Japan/Taiwan)
• Daelim Industrial (South Korea)
• Hyundai Engineering & Construction (South Korea)
• JGC Corporation (Japan)
• Saipem (Italy)
• Samsung Engineering (South Korea)
• Tecnicas Reunidas (Spain)

The project is being tendered in as one lump-sum turnkey (LSTK) contract and will cover the construction of a lube hydrocracker, as well as offsites and utilities and other supporting services such as a tank farm and additional storage.

The project is being tendered on an in-kingdom and out of kingdom (IK-OOK) basis, which means that engineering and other essential parts of the work can be carried out overseas in the home offices of the winning bidder.

“The client has decided not to release this in three or four packages and wants one contractor to handle the whole scheme,” says a contracting source based in Saudi Arabia. “The prequalification period was tough and only seven bidders remain.”

The new hydrocracker at the Yanbu refinery will produce high quality type-three oil, used in the engines of luxury cars. Type-three oil is not produced in the Gulf. Other work includes increasing the capacity of the vacuum distillation unit and adding storage tanks, as well as an upgrade of electrical facilities.

MEED reported in February that the US’ Jacobs Engineering was awarded the front-end engineering and design work for the expansion.

Luberef currently produces about 280,000 tonnes a year (t/y) of lubricants at its Yanbu refinery and about 550,000 t/y in total from Yanbu and Jeddah. The company has not disclosed the exact capacity of the expansion.

Luberef is a 70:30 joint venture between Saudi Aramco and the local Jadwa Investment.