Revised expansion of Saudi Arabias largest oil refinery expected to retendered in third quarter
State-owned oil major Saudi Aramco has started the prequalification process for the retender of the Ras Tanura refinery clean fuels and aromatics project in the Eastern Province of Saudi Arabia.
Solicitations of interest have been sent out to international engineering, procurement and construction (EPC) contractors and a full tender is now expected to be released sometime in the third quarter of 2014.
MEED reported in April that Aramco was retendering the work after the initial bids for the engineering, procurement and construction (EPC) packages came in at almost $2bn over the initial budget for the scheme.
The prequalification has started slightly earlier than what was expected, but I think [Aramco] wants to make an award by the first quarter of 2015, says an oil and gas source based in Saudi Arabia.
The project is now being re-tendered with a revised scope that could see the paraxylene production facilities dropped from the programme to cut costs from the budget. This should lower the budget to about $4bn.
If paraxylene is dropped, the two remaining packages will be:
- Naphtha and aromatics processing facilities
- Offsite and utilities
The US Jacobs Engineering carried out the front-end engineering and design (feed) for the original scope and has conducted further reconfiguration work for the revised specifications. This is ongoing and means the EPC packages will not be available for release until later in the year.
Before the decision to retender, Aramco had discussions with Japans JGC Corporation and South Koreas Daewoo Engineering & Construction regarding the two technical packages for the scheme. It also had sole discussions with JGC for the offsites and utilities package.
The Ras Tanura refinery is fully owned by Aramco and is the largest oil facility in Saudi Arabia, with a capacity of 550,000 barrels a day (b/d). The company is currently upgrading its domestic refining capacity to lower the sulphur content of its downstream output and diversify the amount of refined products it manufactures.
Ras Tanura has also been earmarked as a potential site for additional petrochemicals production facilities as part of the kingdoms refining petrochemicals integration initiative along with Jizan in the southwest of the kingdom and Yanbu on the red Sea coast.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.