South Koreans clean up on $10bn Ruwais refinery

22 November 2009

Contract awards confirm South Korean firms’ competitive dominance

South Korean contractors have won five major construction contacts worth a total of $9.6bn on a major refinery expansion project in Abu Dhabi, cementing their dominance in the local market this year.

The final three deals were awarded on 19 November according to Abu Dhabi Oil Refining Company (Takreer), which is the client on the scheme to expand the Ruwais refining complex from 417,000 barrels a day (b/d) to 817,000 b/d.

Samsung Engineering was handed an engineering, procurement, and construction deal worth $2.7bn for the offsites and utilities, Takreer said. GS Engineering & Construction and Daewoo Engineering & Construction were respectively awarded a $500m deal to build marine facilities and the $1.2bn contract to build a new storage tank farm at the complex.

Takreer announced another $5.2bn of contract awards on the scheme on 4 November, which were also won by South Korean firms. SK Engineering & Construction won the $2.1bn deal to build the main crude distillation unit and GS Engineering & Construction took the $3.1bn deal to build the residual fluid catalytic cracker.

Some of the South Korean firms’ bids were as much as 10-20 per cent lower than their nearest competitors’, according to an executive who worked on prices for the deals.

“This just proves how competitive the South Koreans can be, how aggressive they are in pursuing deals, and how much lower they can go than most western firms,” says the business development manager of one European firm. “They are simply impossible to beat – some of these prices just wouldn’t be profitable for us in the slightest.”

With the addition of contracts for site preparation and dredging works, the Ruwais refinery expansion is worth an estimated $10.5bn.


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