Cost of Saudi Aramco's Crude Oil Refinery Project in Yanbu Escalates to $12 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Aramco's proposed crude oil refinery in Yanbu, Saudi Arabia, may cost $12 billion to build. The reason the cost has escalated is due to equipment and labor shortages. KBR Incorporated (NYSE:KBR) (Houston, Texas) has been chosen as the project management contractor for the proposed 400,000-barrel-per-day (BBL/d) crude oil refinery, which will process crude oil from Saudi Arabia. The front-end engineering design work has been completed and the bidding for the engineering and construction firm has been moved to spring 2009. Construction is expected to begin in fall 2010 and take about 48 months to complete.

Saudi Aramco has five domestic refineries in Riyadh, Ras Tanura, Rabigh, Yanbu and Jiddah that have a combined capacity of approximately 1.4 million BBL/d. The company's two domestic joint-venture refineries, with ExxonMobil (NYSE:XOM) (Irving, Texas) in Yanbu and Shell (NYSE:RDS.A) (The Hague, The Netherlands) in Jubail, bring the country's refining capacity to more than 1.9 million BBL/d. Saudi Aramco explores for and produces crude oil and natural gas. It manufactures a wide range of petroleum products from oil and gas. It markets crude oil, gas and petroleum products domestically and internationally.

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