Saudi Aramco and ConocoPhillips Selects Six Preferred Bidders for Yanbu Refinery

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The world's leading oil producer, state-owned Saudi Arabian Oil Company (Saudi Aramco) (Dhahran, Saudi Arabia) is reported to have picked six preferred bidders for the main construction contracts for the $10 billion Yanbu refinery. The refinery project is a 50:50 joint venture between Saudi Aramco and ConocoPhillips (NYSE:COP) (Houston, Texas). The 400,000-barrel-per-day (BBL/d) refinery project will be developed at Yanbu on the Red Sea coast of Saudi Arabia. Saudi Arabia's target is to ramp up the country's domestic refining capacity from the existing 2.1 million BBL/d to about 3.8 million BBL/d. The refinery is slated to be commissioned in 2013 and will process heavy crudes from the nation's largest offshore oil project on the Moneefa oilfield.

The selected bidders include:

• SK Engineering & Construction Company Limited (Seoul, South Korea) for the crude distillation unit
• Tecnicas Reunidas SA (MCE:TRE) (Madrid, Spain) for the refinery's main coker unit
• Daelim Industrial Company Limited (SEO:000210) (Seoul) for the gasoline unit
• GS Engineering & Construction Corporation (SEO:006360) (Seoul) for the hydrocracking unit.

Engineering, procurement and construction (EPC) company Engineering for the Petroleum and Process Industries (Cairo, Egypt) has reportedly been selected to build the main storage units of the refinery, and Dayim Punj Lloyd Construction Contracting Company Limited (Al-Khobar, Saudi Arabia) will build the offsite pipelines.

According to Middle East business intelligence magazine MEED (London, England), ConocoPhillips will make a final decision about the company's investment in the project by May this year, and the contracts will be awarded only after that. The estimated cost of the Yanbu project increased from an initial $6 billion estimate in 2006 to $12 billion in 2008.

The bidding process was stopped in November 2009 because of the uncertain situation in the global financial market. Both Saudi Aramco and ConocoPhillips are reported to be happy with the bids and are likely to hold another round of negotiations with the competing companies. An official announcement is expected later this month, and contracts are likely to be awarded in May. None of the companies have disclosed the details of their bids. None of the announcements about the selected bidders has officially been confirmed by the two joint venture partners.

According to reports in January this year, more than 20 international companies submitted bids for the various refinery packages. The five EPC contracts are worth a total of about $6.6 billion. The cost breakdown includes the $970 million crude distillation unit, the $1.2 billion coker unit, the $2.3 billion gasoline-processing unit, the $1.2 billion hydrocracking unit and the $900 million tank farm.

Saudi Aramco is developing another refinery with the same capacity with international oil and gas company Total SA (NYSE:TOT) (Courbevoie, France).

View Project Report - 97000268 200005613 200005619 200005798 200005807 200006316 200006320 200006345

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.