Sinopec is awarded Hamriyah fuel storage contract

19 September 2011

Chinese company finally breaks into UAE oil and gas market

Abu Dhabi Oil Refining Company (Takreer) has awarded China Petroleum & Chemical Corporation (Sinopec) the estimated $124m contract to build its tank farm at the Hamriyah Free Zone in Sharjah.

It is the first oil and gas tender won by the Chinese firm in the UAE. The award comes after a series of delays that culminated in Takreer cancelling an award letter to Sinopec.

The project scope is for the engineering, procurement and construction (EPC) of 10 fuel tanks and associated facilities to be used by Abu Dhabi National Oil Company (Adnoc) Distribution. Takreer took over in the second quarter of the year after Adnoc cancelled its tender and withdrew from the project.

Sinopec submitted the lowest bid for the 83,000-cubic-metre tank farm tender, only to be frustrated when the award was cancelled in June (MEED 26:06:11).

The bidders

  • China Petroleum & Chemical Corporation (Sinopec) (China)
  • Larson & Toubro (India)
  • Litwin (France)
  • Al-Jaber Group (local)
  • Chicago Bridge & Iron Company (US)
  • Descon Engineering (Pakistan)
  • Hyundai Engineering & Construction (South Korea)
  • OT Infrastructure & Energy Services (India)

Source: MEED

The company then received another award letter for the project in July and was given the go-ahead to start construction at the beginning of September.

There will also be a second EPC contract awarded for the project, says a source close to the project.

The tank farm is intended to store petroleum products, including gasoline, diesel, fuel oil and jet fuel, and act as main supply point for service stations in Sharjah, Ajman, Umm al-Quwain and the central region.

Adnoc is expanding its distribution network outside Abu Dhabi and Dubai, after Dubai-owned Emirates National Oil Company (Enoc) and Emirates Petroleum Products Company (Eppco) withdrew their petrol station network. The Dubai companies were no longer able to sustain the losses on subsidised petrol, and limited their sales to their home emirate when it became clear that the Arab popular uprisings would not allow for a rise in petrol prices.

Sinopec’s rival bidders for the tank farm were local Al-Jaber Group, US-based Chicago Bridge & Iron Company, Pakistan’s Descon Engineering, South Korea’s Hyundai Engineering & Construction and India’s IOT Infrastructure & Energy Services.

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