Monday, Jun 27, 2011
RIYADH (Zawya Dow Jones)--State-run Saudi Arabian Oil Co., or Saudi Aramco, may invite bids in the second quarter next year, earlier than planned, for the contract to build a $7 billion refinery at Jizan in the kingdom's southwest that will supply the local market, a person familiar with the matter said Monday.
Aramco's original plan was to invite bids for the engineering, procurement and construction contracts by the end of 2012, the person, who declined to be named, told Zawya Dow Jones. The person didn't say why the project schedule was brought forward.
The 400,000-barrel-a-day Jizan refinery, to be located on the Red Sea, aims to provide refined products for the domestic market, which is facing rapidly rising demand. The project was initially due to be implemented by the Saudi government as a private sector initiative but, after generating limited interest, was handed over to Aramco.
Saudi Arabia, the Middle East's biggest economy, has seen its domestic energy requirements surge in recent years as the government spent oil revenues on new industries and infrastructure to diversify the local economy and to accommodate the kingdom's growing population.
Saudi oil minister Ali Naimi said in the past that the Jizan refinery was expected to start operations in the first quarter of 2015.
In February, Aramco awarded KBR Inc. (KBR) the front-end engineering and design, or FEED, contract for the project. KBR is also assisting Aramco in overseeing, managing and directing the work-related activities for all phases of the Jizan refinery and marine terminal project.
The project is one of several large-scale refineries being developed in the kingdom. Other projects include two 400,000-barrel-a-day export refineries--one at Jubail in the country's east and one at Yanbu in the west.
-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
27-06-11 1012GMT
