Abu Dhabi Oil Refining Company (Takreer) has cancelled China Petroleum & Chemical Corporation’s (Sinopec) letter of award (LoA) for the fuel storage project in Sharjah’s Hamriyah free zone.

Bidding companies are left in the dark as to the reasons for the continued delays to the tender.

Takreer took over the project in the second quarter of 2010 after parent Adu Dhabi National Oil Company (Adnoc) had cancelled the engineering, procurement and construction (EPC) tenders for the 83,000 cubic metre tank farm.

Sinopec submitted the lowest commercial bids, after the bidding process was restarted in June 2010. But the Chinese company was denied its first contract award in the UAE, as Takreer delayed its decision. (MEED 6:5:11)

Now the project has been hit by a further setback. “Sinopec LoA has been cancelled till further notification,” says a source at a competing bidder.

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)
  • IOT Infrastructure & Energy Services (India)

Source: MEED

Takreer has not given contractors any explanation for the latest delay. One source said he understood the delay was due to a change in the scope of the project. The tender calls for the construction of 10 storage tanks and associated facilities and infrastructure.

The company has also not given any indication as to the further cause of action.

“Nobody knows what is going to happen,” says a source at another bidder.

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-Qaiwain and the central region.

Sinopec had undercut the competition with a $124m bid for the project. India’s Larsen & Toubro submitted the second lowest bid at about $130m, with France’s Litwin bidding at around $140m. Larsen & Toubro’s technical bid was evaluated as the strongest by Takreer, with Sinopec’s bid only ranking fifth out of eight bidders.

The other bidders are the 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.

While the main package has been put on hold, Takreer has issued a tender for the construction of the marine works for the project, with commercial bids due on July 4.

Takreer and Sinopec could not be reached for comment.