Saudi AramcoSaudi Aramco

TotalTotal

The project suffered delays as the two companies looked to capitalize on lower construction costs and bring the overall price tag to below $10 billion. The refinery, which will process Arabian heavy crude, is expected to be fully operational by the second half of 2013.

Tuesday's agreements were signed by Saudi Aramco Total Refining and Petrochemical Company (SATORP) President and CEO Salem Shaheen and presidents of the contractor companies. Speaking on the occasion, Shaheen said: "On its completion, the new refinery will be one of the most advanced refineries worldwide, transforming Arabian heavy crude into high specification products that are intended to meet the ever-increasing demand for environment-friendly fuel types."

He pointed out that the company had awarded 15 pre-planned EPC contracts to a number of highly experienced local and international companies for the execution of its joint venture project. He said SATORP encouraged local companies to participate in the execution of this mega project and to compete for the EPC contracts in line with the company's policies and objectives. He said 25 percent of the company's shares would be offered to Saudi nationals in an initial public offering (IPO) after the finalization of relevant procedures. "This will eventually leave Saudi AramcoSaudi Aramco and TotalTotal each with a 37.5 percent share of the company's ownership," Shaheen said. He said the mega-project was a clear indication of how stable the investment environment in Saudi Arabia was in various economic sectors. The stability has prompted many international companies to seek local investment opportunities. Shaheen also pointed out that the project would add value to the local economy by providing jobs and creating more investment opportunities for Saudi businessmen during subsequent industrial stages. It is estimated that the refinery will produce about 1,200 direct employment opportunities, each of which will provide five to six indirect job opportunities.

Also present at Tuesday's signing ceremony was Chairman of SATORP's board of directors Samir A. Al-Tubayyeb and a number of other Saudi AramcoSaudi Aramco and TotalTotal officials, as well as representatives from the contractor companies and the media.

The EPC contract for permanent infrastructure went to Al-Osais Contracting Co; the refinery tank farm contract was awarded to Petro Steel; the pipelines and off plot facilities contract went to Gulf Consolidated Contractors Co. Ltd.; the auxiliary utilities to Mohammed Rashid Khathlan Est. for Contracting; the aromatics contract went to Samsung Engineering Co.; the sulfur/amine to Daelim Industrial Co. Ltd.; the interconnecting utilities to Technip SpA; the plant utilities contract was awarded to S.K. Engineering and Construction; the distillation and hydrotreating to Tecnicas Reunidas; the port tank farm to Dayim Punj Lloyd Construction Contracting Co. Ltd; the coker contract went to Chiyoda/Samsung; the conversion contract was awarded to Technip SpA and the telecommunication system contract to Sumitomo Corporation.

SATORP had earlier signed two contracts with two Saudi companies. Site preparation for temporary construction facilities contract was awarded to Abdul Rahman M. Al-Shalawi Est. for Contracting and the contract for building temporary construction facilities was awarded to Contracting and Construction Enterprises Ltd.

By Siraj Wahab

© Arab News 2009

 

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