Fluor Bags South African Refinery's Clean Fuel FEED Contract

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--South Africa's 180,000-barrel-per-day (BBL/d) SAPREF refinery in Durban, jointly owned by Royal Dutch Shell plc (NYSE:RDS) (The Hague, Netherlands) and BP plc (NYSE:BP) (London, England), has awarded the front-end engineering design contract for its Clean Fuel 2 project to Fluor Corporation (NYSE:FLR) (Irving, Texas).

The project will substantially upgrade the refinery by improving the quality of transportation fuel through a reduction in the levels of sulfur, benzene and aromatics. Recent legislation requires achieving the Clean Fuels 2 specifications by 2017.

The new specifications aim to reduce the aromatic and benzene content of petrol to meet the Euro 4 emissions standards. They include the reduction of sulfur from 500 parts per million (ppm) to 10 ppm; the lowering of benzene from 5% to 1% of volume; the reduction of aromatic from 50% to 35% of volume; and the specification of olefins at 18% of volume.

The agreement between SAPREF and Fluor allows for the potential signing of an engineering, procurement, construction and management contract at a later date. Fluor has been providing ongoing site support work for SAPREF for nearly 20 years.

The FEED contract will be the first executed in Africa under Shell's enterprise framework agreement with Fluor, which encompasses engineering and project management services throughout Europe, Africa and the Middle East.

SAPREF, which represents 35% of South Africa's refining capacity, will be shut down for nine weeks, starting April 26, for planned maintenance, according to the Department of Energy. As winter arrives, this could factor into problems with LPG shortages as other refineries experience unplanned shutdowns.

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