Saudi Aramco launches Jizan refinery construction management tender

26 May 2010

New refinery set to process 400,000 barrels a day of crude oil

State energy giant Saudi Aramco has approached international engineering firms over a design and construction management contract for its new Jizan refinery project.

Saudi Aramco invited selected contractors to express their interest in the project management consultancy and construction management services contract in mid-May, and hopes to tender the deal by the end of the year, say sources close to the project.

The selected contractor will oversee the design and construction of the first phase of the project, one source with knowledge of the scheme says. Saudi Aramco is yet to approach firms over a related front end engineering and design (Feed) deal.

The estimated $7bn Jizan refinery was originally planned to be built as a public-private partnership between the kingdom’s Petroleum & Mineral Resources Ministry and a foreign investor. Saudi Aramco, however, took over management of the development in February after only two consortiums submitted proposals for the project in a 7 November bid round (MEED 9:2:2010).

Saudi Aramco has decided to break the refinery down into two phases. The first part of the development will be a simple hydroskimming refinery, which can be built quickly and will provide necessary basic fuel products, an advisor on the project tells MEED.

The energy giant wants to tender engineering, procurement and construction deals to build the first phase in 2011. More complex units such as a hydrocracker that produces more saleable gasoline products will be added during a second phase of the project, design contracts for which are likely to be launched in 2011.

The refinery is likely to have a capacity of 400,000 barrels of oil a day, as it will effectively replace supplies which were due to come from an expansion of the existing Ras Tanura refinery. This development was shelved earlier in 2010 after Saudi Aramco decided to move an associated joint venture petrochemicals project with the US’ Dow Chemical to Jubail Industrial City (MEED 19:4:2010).

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