Saudi Aramco is planning to build a $600m bulk storage facility at Shoaiba that will provide refined petroleum products to the southwest of the kingdom.

The facility will consist of a marine terminal and a tank farm that will be able to store about 400,000 barrels of gasoline, benzene and diesel. The products will be shipped in from refineries at Yanbu and Petro Rabigh before being distributed along the southwest coast.

Saudi energy consumption*
Gas 56
Oil 44
*=2008. Source: EIA

“Jeddah port is a very busy international port, so Aramco wants to take that out of the equation and make their operations [in the southwest of the kingdom] more efficient and streamlined,” says a source familiar with the project. “Shoaiba is about 220 kilometres south of Jeddah, so it is a lot closer to the market.”

The project is also unusual in that Aramco are planning a build-own-transfer (BOT) scheme for the project. The lease being offered is 22 years plus three years for construction.

Aramco is planning to issue tenders and it is understood that 22 bidders are interested, although it is likely that this figure will be reduced to about 10 at a later date.

“A lot of the bidders will probably be doing this in a joint venture with maybe two to three companies offering a different skill set for each facet of the project,” says the source. “Also joint ventures offer less risk, of course.”

There is no clear indication as to an exact date for the tender to be released by Aramco, but a decision is expected by the end of 2011.

The project is the latest of several schemes aimed at revamping the kingdoms distribution network of petroleum products.

Other bulk storage facilities currently under construction include a $140m plant at Wasea in the central region of the Saudi Arabia, as well as several smaller storage areas spread across the kingdom.