Sunday, Jan 28, 2007
RIYADH (Zawya Dow Jones)--Saudi Arabia's oil ministry has started to receive expression of interest packages from companies keen to bid for the Jizan Oil refinery, an official said Sunday.
The license is expected to be awarded by the end of 2007, said Yahia Al Zaid, advisor to the Saudi Petroleum Ministry.
"We have opened the door for local and international investors to submit their EOI packages," Al Zaid told Dow Jones Newswires.
"The door will be open to receive them for six weeks. It is the start of the process to issue the license by the year end," he said.
Saudi Arabia announced last November that it aims to build a crude oil refinery near the southern city of Jizan on the Red Sea to boost the kingdom's position as a major oil refiner.
Al Zaid said that the refinery, which will be a semi or full-conversion plant, will produce between 250,000 and 400,000 barrels per day.
The refinery could be integrated with a petrochemicals or power plant, according to the official website dedicated to this project.
The site says that the project will guarantee crude oil supply via a long term agreement with Saudi Aramco based on international pricing.
Saudi Arabia, the largest crude oil exporter, said that a request for proposals is to be issued to qualified companies in the second quarter of 2007.
Detailed proposals from qualified companies are to be submitted to the oil ministry by the beginning of the fourth quarter of 2007, and the license award is expected by end of 2007.
Al Zaid refused to give more information on private sector interest to bid for the project, saying that investor appetite for this project will be known in a month from now.
He added that the bidding will be open for international companies, but he said foreign companies will need to include a local partner as the government aims to encourage local business.
However, the Saudi official refused to elaborate on limits to foreign participation in the bidders capital.
Among the interested companies are the Saudi Joint Stock Co. and a consortium of Saudi-based Nama Chemicals Co. (2210.SA)and Malaysia's Petronas (PET.YY).
Saudi Arabia, which is investing heavily to increase its refining capacity, said in November that it will consider building another refinery in the country once the Jazan project has been implemented.
-By Anees Al Qudaihi, Dow Jones Newswires; +966 1 291 4872; anees.alqudaihi@dojones.com (Oliver Klaus in Dubai also contributed to this report.)
Copyright (c) 2007 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
28-01-07 1141GMT
