Saudi Aramco has started to start moving again on the proposed $600m bulk storage facility at Shoaiba, which will provide refined petroleum products to the southwest of the kingdom.
The much-debated scheme has been on hold for at least the past 12 months, but Aramco has now appointed the US’ Mustang Engineering to carry out the front-end engineering and design (feed) for the project.
“It has been a long time coming, but we are now seeing movement again on the Shoaiba bulk plant,” says an oil and gas executive based in Saudi Arabia. “Aramco has always planned to build it, but it has taken some time to come to fruition.”
Tenders for the engineering, procurement and construction (EPC) are expected to be released on completion of the feed later in 2013. An exact timeline for the scheme has not yet been established.
Aramco is expected to pursue a lump-sum turnkey (LSTK) model for the plant. The oil company originally considered pursuing a build-own-transfer (BOT) strategy for the project.
The facility will comprise a marine terminal and a tank farm with a 400,000-barrel storage capacity that can house gasoline, benzene and diesel. The products will be shipped in from refineries at Yanbu and PetroRabigh before being distributed along the southwest coast.
Shoaiba is about 220 kilometres south of Jeddah and Aramco believes a bulk plant in that area would make its domestic distribution operations more streamlined.
The project is the latest of several schemes aimed at revamping the kingdom’s distribution network of petroleum products. This includes upgrades to the pipeline network, as well as rehabilitating existing bulk plants and other infrastructure.
Saudi Arabia has one of the highest annual growth rates for oil use in the world at 6 per cent. Gasoline demand is growing even more quickly at 7.2 per cent.