Takreer to award refinery expansion deals in October

18 September 2009

Abu Dhabi is requesting final commercial bids on the plant by 30 September

State-owned Abu Dhabi Oil Refining Company (Takreer) will award two contracts to expand capacity at its Ruwais refinery in October.

The expansion will increase the refinery’s capacity by 400,000 barrels a day (b/d) to 817,000 b/d when it comes on line in 2014.

Takreer is asking bidders for the engineering, procurement and construction (EPC) deals to build the main process units at the plant to submit final commercial prices outlining their proposed costs by 30 September.

The bidders handed in technical bids explaining how they would carry out the engineering work on 19 August.

The winner of the first contract will build crude-distillation units at the plant. The units will break down the crude oil into its components, such as the petroleum product naphtha and basic chemical benzene. Bidders include SK Engineering & Construction of South Korea, Japan’s Toyo, Italy’s Tecnimont and Spain’s TR.

The winner of the second contract will build the residual fluid catalytic cracker, which breaks up the heavier components of crude oil to produce more valuable petroleum products.

The bidders for this contract include South Korea’s GS Engineering & Construction, JGC of Japan, Italy’s Saipem, France’s Technip, and the UK’s Petrofac.

Takreer is keen to award the contracts as soon as possible as it hopes to take advantage of the current relatively low commodity and construction costs.

Contractors, who predict commodity prices will increase sharply in the first half of next year, say they may ask for an extension to the bid deadline.

“There is a fair chance that the deadline will be extended,” a source at one of the bidding firms tells MEED. “A lot of people want a little more time to make sure that their prices are competitive, but at the same time that they can still make money on the job.”

Meanwhile, technical bids on the three main infrastructure packages at the plant went in on 16 September, with commercial bids to follow on 23 October.

The first infrastructure contract is an offsites and utilities package, which covers further process and safety facilities such as water-cooling and gas-flaring systems.

Bidders on this deal include South Korea’s Daelim Corporation, Hyundai Heavy Industries, Samsung Engineering, and Hyundai Engineering & Construction, as well as Argentina’s Technint and Petrofac.

Bidders for the second infrastructure contract, which covers the main storage facilities at the plant, include South Korea’s Daewoo Engineering & Construction, Hyundai Heavy Industries and Samsung, the local National Petroleum Construction Company, and Punj Lloyd of India.

The third infrastructure deal covers the marine facilities for loading and offloading equipment at the site. Contractors bidding on this contract include South Korea’s GS Engineering & Construction, Hyundai Engineering & Construction and Saipem, and Belgium’s Besix.

The project to expand the refinery is estimated to be worth more than $8bn in total.

It is the only new refinery project to go ahead in the UAE so far this year.

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