State-owned Saudi AramcoSaudi Aramco earlier this month invited bids for key contracts to build its new 400,000 b/d joint venture refinery with ConocoPhillipsConocoPhillips at the Red Sea port of Yanbu'. On 16 May, Saudi AramcoSaudi Aramco announced it was proceeding with the Yanbu' project, quashing rumors that cost escalation was killing the estimated $13bn initiative. However, the fact that no Final Investment Decision (FID) was announced left lingering question marks over the project. In contrast, Saudi AramcoSaudi Aramco had announced FID for Yanbu’s sister project – a 400,000 b/d export refinery with Total at Jubail (MEES , 19 May). On the Yanbu' project MEES understands that, unusually, the partners still have not secured a gas supply agreement for electric power generation, even though the construction phase has been launched.

While projected costs for Jubail have broken through the $15bn mark, those for Yanbu' are estimated at around $13bn, MEES understands. This is because the ConocoPhillipsConocoPhillips joint venture will, unlike the Jubail project, not produce any petrochemicals and it will also use existing port facilities. Both Yanbu' and Jubail will be full conversion refineries and be configured to run mainly heavy, higher sulfur crude from the 900,000 b/d Manifa increment, due on-stream starting in 2011.

EPC Bidding Schedule

Prospective bidders for the four main Yanbu' engineering, procurement and construction (EPC) contracts have visited the proposed site. Bids are due in by end-October/early-November for award in 1Q09. While the 16 May announcement that Saudi AramcoSaudi Aramco and ConocoPhillipsConocoPhillips were proceeding with the project said that Yanbu' was now “targeted to start-up in 2013” (MEES , 26 May), MEES understands that they still hope for start-up in 2012 and are aiming for an ambitious 45-47 month construction schedule. With Yanbu', Saudi AramcoSaudi Aramco has relaxed recently imposed rules demanding greater Saudi manpower and content, MEES understands. Both Yanbu' and Jubail are going to be constructed on a lump sum turnkey basis, unlike a planned $1.5bn upgrade to the 400,000 b/d ExxonMobilExxonMobil-Saudi AramcoSaudi Aramco joint venture SamrefSamref refinery, which will be done on a reimbursable costs-plus basis, engineering sources tell MEES . Bids for the SamrefSamref upgrade are due in August, for award by year-end, MEES understands.

Korea’s SamsungSamsung and Daelim, Spain’s Technidas Reunidas (TR), Italy’s Snamprogetti and Japan’s JGCJGC are shortlisted for the crude distillation unit package. Japan’s Chiyoda and JGCJGC, France’s TechnipTechnip, Snamprogetti, TR, and Korea’s HyundaiHyundai are all shortlisted for the coker package. Chiyoda, Snamprogetti, US firm Foster WheelerFoster Wheeler, TR, TechnipTechnip and SamsungSamsung are shortlisted for the gasoline complex package. The shortlist for the hydrocracker and hydrogen generation unit package is made up of Chiyoda, TR, Snamprogetti, Foster WheelerFoster Wheeler and Chicago-based CBI Lummus, MEES understands.