South Korean Firms Appointed as Engineering and Construction Firms for Saudi Arabian Refinery

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Researched by Industrial Info Resources (Sugar Land, Texas)--Yanbu Industrial City, one of two industrial cities in Saudi Arabia, was established in 1975 by a royal decree for the development of infrastructure and energy-based industries. Roughly two-thirds of the city's 158-square-kilometer area is devoted to industrial sites, hosting more than 50 facilities for heavy and light industry. Next year, Saudi Aramco (Dharan, Saudi Arabia) plans to begin construction of a massive, 400,000-barrel-per-day (BBL/d) petroleum refinery in Yanbu, which is located on the Red Sea, about 250 kilometers from Jeddah and is the terminus for pipelines that carry natural gas and crude oil from the eastern portion of the country.

In July, Saudi Aramco announced that Daelim Industrial Company Limited (SEO:000210) (Seoul, South Korea) and S K Engineering & Construction Company Limited (SKEC) (Seoul) had been awarded engineering and construction contracts for the hydrocracker unit addition and the crude and vacuum unit addition, respectively. Since its establishment in 1939, Daelim Industrial Company's engineering and construction E&C division has help pave the way for the Daelim Business Conglomerate. The division has been responsible for several overseas projects, including Thailand's Thai Olefins Plant, Iran's Kangan Gas Refinery Plant, Phase I of Iran's South Pars Refinery, and Egypt's Midor Oil Refinery. Daelim will begin construction on Saudi Aramco's Yanbu Refinery next March and is expected to finish construction to coincide with the rest of the refinery in the third quarter of 2014. When complete, the $1.2 billion hydrocracker will handle 80,000 BBL/d and will convert low-value gas oils to valuable products.

SKEC is scheduled to start construction on the crude and vacuum unit addition at the same time. When completed in 2014, the $800 million crude and vacuum unit will handle 400,000 BBL/d of heavy crude oil from the eastern portion of the country. SKEC, founded in 1977, has been involved in many domestic industrial projects, including the Donghae Thermal Plant Project, the construction of units 3 and 4 of Korea's largest power plant, the Yeongheung thermal power plant, and the Sangam community energy system. The company has also been in charge of many projects in China and the Philippines.

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