Rabigh contract awards accelerate

08 July 2005
The joint venture of Saudi Aramco and Japan's Sumitomo Chemical Company has taken a significant step in its programme to upgrade the kingdom's biggest refinery at Rabigh and turn it into a world-scale integrated refining and petrochemicals complex, by selecting three contractors to carry out four main packages. The price tag of the Rabigh scheme is now estimated at about $8,000 million, almost double the original estimate of $4,300 million as a result of rising material and equipment costs (MEED 24:6:05).

Spain's Tecnicas Reunidas (TR) has been selected for the two main packages, totalling $900 million-1,000 million, on the project to expand the refinery by 80,000 barrels a day (b/d). TR was picked for the work after it submitted the low bid under a proposal to carry out both packages jointly. The contract will be partly carried out on a cost reimbursable basis and not - as originally planned - purely on an engineering, procurement, construction and commissioning (EPCC) basis. It will be converted to lump-sum turnkey (LSTK) after 50-60 per cent of the detailed engineering and the procurement of some long-lead items is completed. Aramco changed its contracting strategy in an attempt to control cost and risk for the contractor.

The first package involves the installation of a vacuum distillation unit, two vacuum gas oil hydrotreaters, a hydrogen plant and two flue gas desulphurisation (FGD) units. Package 2 calls for the construction of a butane complex consisting of two amine regeneration units, sour water strippers and sulphur recovery units. TR's competitor on the first package was Canada's SNC Lavalin. The other bidders on package 2 were SNC and Taiwan's CTCI.

Italy-based Techint has been selected for the main utilities and offsites (U&O) package on the Rabigh development, which is worth $400 million-500 million. The contract calls for the construction of seawater intake and cooling water pumping systems, an air separation unit, a compressed air system, a reverse osmosis (RO) water system, a sulphur forming unit, a wastewater plant and related infrastructure, including a berth and jetty. The other bidders for the contract, which will also be executed on a cost reimbursable basis before being converted to LSTK, included Japan's Ishikawajima-Harima Heavy Industries (IHI)and Italy's Saipem.

Finally, the client has selected the UK's Whessoe Oil & Gasfor the second U&O package, which covers the construction of a storage tank farm. Under the deal, Whessoe will build 32 storage tanks, with capacities ranging from 2,700-33,000 cubic metres for storing different types of petroleum and petrochemical products. Whessoe won the contract against competition from France's Entreposewith Malaysia's KNM Process Systems, and Saipem.

Bid documents were released on 26 June for the estimated $150 million-200 million EPC contract to build parallel ethane and butane pipelines over a distance of 212 kilometres between the Rabigh complex and the existing Yanbu natural gas liquids (NGL) facility. At least five firms are prequalified to bid for the contract by the 3 September deadline.

UK-based Foster Wheeler Energyis the overall project management services (PMS) contractor on the Rabigh programme. Sumitomo-Mitsui Banking Corporation (SMBC)is acting as financial adviser.

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