Contractors bidding on the Abu Dhabi Oil Refining Company (Takreer) expansion of its Ruwais refinery complex say they value the scheme at more than $10bn.
The first two major contracts to be awarded on the scheme will be worth more than $5bn, suggesting an outright value of about $10bn for the development, according to contractors close to the bidding process. Earlier estimates of the Ruwais expansion varied from $8bn-12bn.
MEED reported on 26 October that two South Korean firms, SK Engineering & Construction and GS Engineering & Construction, had submitted the lowest bids for the two engineering, procurement, and construction (EPC) deals covering the construction of a new crude distillation unit and a residual fluid catalytic cracker (MEED 26:10:09) for the project.
The expansion will increase the refinery’s capacity by 400,000 barrels a day (b/d) to 817,000 b/d when it comes on line in 2014.
Sources close to the deal say SK’s bid for the crude distillation unit was $2.19bn, closely followed by a bid of $2.3bn from a consortium of Japan’s Toyo Engineering Corporation and another South Korean firm, Hyundai Heavy Industries. The distillation unit will break down the crude oil into its components, such as the petroleum product naphtha and basic chemical benzene.
GS’ bid for the residual fluid catalytic cracker job was $3bn, according to the sources. This is 14 per cent lower than a $3.5bn bid for the deal from Paris-based Technip. This unit breaks up the heavier components of crude oil to produce more valuable petroleum products.
Bids for three other deals – offsites and utilities, marine facilities and tank work – are due on 11 November.
Takreer’s budget for the offsites and utilities deal, covering the main supporting infrastructure at Ruwais, is $2.3-2.5bn, according to the bidders. MEED Projects values the marine facilities and tank deals at $270m and $1.3bn respectively.
Preparation of the Ruwais site is estimated to have cost more than $1bn.
“When you add up all the deals along with the project management and design side of things this is a huge project, even bigger than we thought,” says the business development manager at one firm bidding on the scheme. “It is another $10bn-plus project in Abu Dhabi. The zeroes don’t seem to mean anything anymore.”