Ras Tanura upgrade shelved for 12 months

04 January 2015

Saudi Aramco’s refinery rehabilitation put on hold for a year as firm prioritises upstream oil and gas schemes

Saudi Aramco’s $3bn Ras Tanura Refinery Clean Fuels Project has become the first casualty of lower oil prices after being placed on hold for at least 12 months by the state-owned oil company.

The news will come as a blow to engineering, procurement and construction (EPC) contractors, who have spent the past few months formulating bids for the two packages on offer with a view to submitting them in early February.

“We were expecting some projects to be halted and it is looking like it will be the downstream schemes that will be affected,” says an official from an EPC contractor. “Hopefully this will be the only project affected.”

The Ras Tanura scheme was meant to have been awarded in late 2013 or early 2014, but was retendered after the original bids came in well over Aramco’s budget. A total of 120 contractors were hoping to bid on the two packages, which were:

  • Offsites and utilities
  • Naphtha and toluene

The naphtha and toluene package was to be split into units with the following capacities:

  • Naphtha hydrotreater – 140,000 barrels a day (b/d)
  • Catalytic cracking reformer – 90,000 b/d
  • Isomerisation – 65,000 b/d
  • Toluene – 70,000 b/d

Contractors are now hoping that the project will be resurrected in late 2015 or early 2016, although if the oil prices continue to fall it is likely Aramco will focus on upstream oil and gas projects rather than continue to invest in refinery and petrochemicals schemes.

Ras Tanura has also been earmarked as a potential site for additional petrochemicals production facilities, as part of the kingdom’s refining petrochemicals integration initiative, along with Jizan in the southwest of the kingdom and Yanbu on the Red Sea coast. However, these plans are almost certain to stall by several years as oil prices continue to fall.

The Ras Tanura refinery is fully owned by Aramco and is the largest oil facility in Saudi Arabia, with a capacity of 550,000 b/d.

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