South Koreans favourites for $1bn Luberef expansion

09 October 2012

Samsung Engineering and Hyundai E&C lead chase for Saudi Arabian lubricant refinery project

South Korea’s Hyundai Engineering & Construction and Samsung Engineering are the two frontrunners for the engineering, procurement and construction (EPC) contract for Saudi Aramco Lubricating Oil Refining Company’s (Luberef) $1bn expansion.

The two companies submitted the lowest bids for the contract and now clarification meetings are taking place before a winner is announced.

“This has been an interesting bidding process with a lot of companies dropping out as it progressed,” says a contracting source familiar with the deal. “Now it is down to two and the market seems to believe that Samsung Engineering is the favourite to win, but nothing has been decided yet.”

The project is being tendered on a lump-sum turnkey (LSTK) contract basis, which will be a combination of grassroots construction and brownfield rehabilitation. The exact scope was previously unknown, but documents seen by MEED indicate it will involve the construction of a 23,000-barrel-a-day (b/d) lube hydrocracker and catalytic ISO-dewaxing complex, which will include hydrogen manufacturing, sour gas absorption, sulphur recovery and prilling units.

That will make up the main package, but Luberef is also tendering a smaller package for a propane deasphalter (PDA) unit that will increase its propane deasphalting from 6,500 b/d to 12,500 b/d, as well as increase the asphalt capacity to 12,000 b/d.

Other upgrades will include modifying existing pipework and building a new water-cooling system, complete with cooling towers.

Luberef is a 70:30 joint venture of Saudi Aramco and the local Jadwa Investment.

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