Samsung Engineering bids low for Sohar refinery expansion

24 September 2013

Offer of $1.89bn undercuts four other South Korean contractors for Oman project

South Korea’s Samsung Engineering has emerged as the lowest bidder for the expansion of the Sohar refinery in the north of Oman with an offer of $1.89bn.

Project owner Oman Refineries & Petroleum Industries Company (Orpic) received six bids for the engineering, procurement and construction (EPC) contract on 20 May.

The next lowest bidders were fellow South Korean groups GS Engineering and Daelim Industrial with respective bids of $2.13bn and $2.15bn. The other companies vying for the contact were SK& E&C, Hyundai E&C and the sole bidder from outside of Korea, Spain’s Tecnicas Reunidas.

Orpic is expanding the refinery’s capacity to 187,000 barrels a day (b/d) from 116,000 b/d to meet growing demand for fuel and petrochemicals feedstock.

The project, which was tendered in December, will include a 71,500-barrel-a-day (b/d) crude distillation unit, a 96,800-b/d vacuum distillation unit, a delayed coker unit, and additional utilities and offsite facilities. Orpic is aiming to complete the scheme in 2016.

As well as providing extra fuel to meet growing demand in the sultanate, the unit will increase the facility’s propylene production, which will allow Orpic to run its Sohar polypropylene plant at full capacity. It will also provide capacity for the $3.6bn Liwa Plastics petrochemicals project planned nearby.

Along with the EPC contract, Orpic has also opened the commercial bids for the procurement of long-lead items for the refinery expansion project. US-based GE Oil & gas was the lowest bidder with an offer of $7.24m, while Germany’s Siemens made the second-lowest bid of $7.98m.

Orpic received 14 bids in total for the procurement of long-lead items for the project with the highest offer coming in at $25.3m.

The state-owned company is expected to award the EPC and long-lead item contracts during the fourth quarter of 2013.

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