Thursday, Jun 14, 2007
(This updates a story published at 0918 GMT with details and background.)
DUBAI (Dow Jones)--Saudi Arabian Oil Co., the world's largest national oil company, will build an estimated $8 billion refinery in eastern Saudi Arabia to meet rising domestic demand, people familiar with the plans said.
The plant, known as East Coast refinery, is the fourth new facility planned in the kingdom and will boost total domestic refining capacity to above 3.5 million barrels a day by 2012, more than double the U.K.'s.
The refinery will process 400,000 barrels a day of Saudi crude and will be located at Ras Tanura on the Persian Gulf, already home to the country's largest refinery with capacity of 550,000 barrels a day, the people said.
Aramco this week invited international engineering firms to bid in the first stage of the project's tender process. The companies were asked to prequalify by June 25, the people said.
The winning company will carry out engineering and project management on the project, due for completion at the end of 2011, the people said.
Companies including Fluor Corp., Foster Wheeler Ltd. and Technip S.A. have bid for similar contracts in the kingdom.
Persian Gulf governments, flush with cash from three years' of high oil prices, are investing in new crude oil refineries to meet rising demand and tighter specifications for products such as gasoline and diesel, notably in Europe and in the U.S.
Some Organization of Petroleum Exporting Countries members have partly blamed a lack of global refining capacity for ongoing high oil prices.
Aramco last year signed joint venture agreements with Total S.A. and ConocoPhillips to build two 400,000-barrel-a-day export refineries on the country's east and west coasts at an estimated cost of $7 billion each.
The Saudi oil ministry has separately invited local and international companies to bid for a private sector-run refinery with capacity of up to 400,000 barrels a day to be built in Jizan, on the Red Sea coast.
Together with the East Coast refinery, the projects will add as much as 1.6 million barrels a day of refining capacity to the existing 2.0 million barrels a day.
Saudi-based Arab Petroleum Investment Corp., or Apicorp, predicts that Saudi Arabia will spend as much as $85 billion on energy projects between 2007 and 2011.
-By Oliver Klaus, Dow Jones Newswires, +9714 364 4961 Oliver.Klaus@dowjones.com
Copyright (c) 2007 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
14-06-07 1203GMT
