Saudi Aramco Chooses Builders Of Jizan Refinery

Saudi Aramco, the world’s biggest oil producer, said on Sunday it had chosen Asian and European contractors to build the Jizan oil refinery and terminal project in the southwest of the country.

The engineering, procurement and construction contracts are for a 400,000 barrel per day refinery on the Red Sea. Designed to support the growth of major industries in the undeveloped region bordering Yemen, the project is due to be completed in late 2016.

Companies to be awarded contracts include Saudi units of Britain’s Petrofac Ltd and South Korea’s Hyundai Heavy Industries, South Korea’s Hanwha Engineering and Construction Corp and SK Engineering & Construction Co, Spain’s Tecnicas Reunidas, and Japan’s JGC Corp and Hitachi Plant Technologies Ltd.

Saudi Aramco did not reveal the financial size of the contracts, which will be signed next month, but the entire Jizan project is believed to be worth billions of dollars.

The refinery will process Arabian Heavy and Arabian Medium crude oil to produce gasoline, ultra-low sulphur diesel, benzene and paraxylene. The marine terminal will be able to handle Very Large Crude Carriers (VLCCs).

Two industry sources based in Saudi Arabia told Reuters that SK Engineering had submitted the lowest bid for a crude distillation/vacuum distillation unit, while Hyundai Heavy had submitted the lowest bid for a sour water stripper unit and amine regeneration unit. Hanwha was lowest on a marine terminal package, they said.

One of the two sources said Petrofac was lowest bidder on two construction packages for tank farms. Tecnicas Reunidas was lowest on a hydrocracker and a diesel hydrotreater package. JGC was lowest on a naphtha and aromatics package, while Hitachi Plant had the lowest bid for a common utilities package, the source said.