Ras Tanura expansion attracts strong contractor interest

08 February 2009
Progress on bidding process reassures firms over future of $8bn refinery upgrade.

Up to 50 firms are understood to be applying to prequalify to bid for five contracts on the $8bn expansion of the Ras Tanura refinery in Saudi Arabia, with a shortlist of approved bidders to be issued in mid-February.

The setting of a firm timeline for the bidding process has reassured contractors that had previously expressed fears over the economic viability of the project in the current financial climate.

“It seems to be going ahead,” one contractor whose company intends to bid for the work at Ras Tanura tells MEED.

Doubts over the future of the project were raised in early January after contractors said the joint venture partners on the project, the US’ Dow and Saudi Aramco, had approached them to discuss terms that might lower the cost of the project (MEED 2:1:09).

The refinery currently has capacity of 550,000 barrels a day (b/d) of oil, and the expansion will boost that by 400,000 b/d. The expansion is designed to provide feedstock for a $22bn integrated petrochemicals complex on the site (MEED 2:1:09), which is also being developed.

According to one source close to the project, a shortlist of qualifying firms will be issued on 16 February. The approved firms must then declare their intentions to bid for up to five engineering, procurement, and construction (EPC) contracts by March, with final technical and commercial bids to be submitted by July. Awards are expected to be made by November.

Package one comprises three elements: a crude and vacuum distillation unit for the fractionation of 400,000 b/d of Arabian heavy crude into different streams, for use in downstream units, and establishing power supplies, and common pipe racks.

Package two covers a diesel hydrotreater and continuous catalyst regeneration complex made up of three separate plants. Two of these plants will host diesel hydrotreater units, to process feedstock from the crude and vacuum distillation units, each with capacity of 70,000 b/d.

The other plant will host a 130,000-b/d naphtha hydro-treater unit and two trains for continuous catalyst regeneration, each with a capacity of 50,000 b/d of oil products.

Package three covers four units: a di-glycol amine regeneration and loop system with a 1,400 gallon-a-minute capacity; a sour water stripper to remove contaminants from sour water streams; a sulphur recovery unit to treat acid gas streams; and a flare system to safely release gas and liquid into the atmosphere.

Package four includes utilities and asphalt handling facilities for the complex.

Package five is for a storage facility of 31 tanks with capacities ranging from 50 million to 200 million barrels, and including gasoline and fuel oil blending facilities of 80 million and 220 million barrels respectively.

Separately, bidding for the EPC contracts on Saudi Arabia’s first privately owned refinery, at Jizan, has been delayed until September. Bids had been due by 7 March, but the Petroleum & Mineral Resources Ministry has delayed the deadline to 2 September, citing requests from potential bidders.

Contractors in the region say they believe the delay is due to attempts to cut costs on the project, originally thought to be valued at $10bn. A final award is now due in November.

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