Saudi Arabia's Ministry of Petroleum and Mineral Resources (MinPet) has launched an initiative to solicit proposals from private-sector investors to compete for a license to build, own, and operate a world-class export refinery in the Jazan Region along the Red Sea in southwestern Saudi Arabia. The refinery would stand out among other Saudi refineries because it would not be state-owned and operated.
Through an Expression of Interest (EOI) phase, MinPet has pre-qualified eight companies based in the Kingdom of Saudi Arabia (KSA) to submit proposals for the project. These companies include the following: Advance Refining and Petrochemical Co. (ARPC); A.K. Al Bakri and Sons Holding; Arabian Company for Water and Power Development (ACWA Power Development); Arabian Peninsula Co. (APC/Corral); Nama Chemicals; National Industrialization Co. (TASNEE); Obeikan Investment Group; and Taqat.
MinPet also has identified 43 International Oil Companies (IOCs) that it will invite to participate with the pre-qualified KSA applicants in a consortium to receive and respond to the RFP for the refinery project. The IOCs include: NORTH AMERICA: Chevron Corp.; ConocoPhillips; ExxonMobil Corp.; Marathon Oil Corp.; Valero Energy Corp.; Occidental Petroleum Corp.; SOUTH AMERICA: Petroleo Brasileiro S.A.; EUROPE: BP Plc; Royal Dutch Shell Plc; Total SA; StatoilHydro ASA; Petrom SA (OMV Group); Corral Petroleum Holdings AB; ERG S.p.A.; MEDITERRANEAN: Compania Espanola de Petroleos S.A.; ENI S.p.A.; Repsol YPF S.A.; EASTERN EUROPE AND RUSSIA: OAO Lukoil; OAO Rosneft Oil Co.; GULF COOPERATION COUNCIL: Abu Dhabi National Oil Co. (ADNOC); Kuwait Petroleum Corp. (KPC); Saudi Arabian Oil Co. (Saudi Aramco); Bahrain Petroleum Co. (BAPCO); Qatar Petroleum; INDIA: Bharat Petroleum Corp. Ltd.; Hindustan Petroleum Corp. Ltd.; Indian Oil Corp. Ltd.; Oil & Natural Gas Corp. Ltd.; Reliance Industries Ltd.; SOUTHEAST ASIA: Petronas; EAST ASIA: China National Offshore Oil Corp.; PetroChina Co. Ltd.; China Petroleum and Chemical Corp. (Sinopec); CPC Corp. Taiwan; Formosa Plastics Group; Cosmo Oil Co. Ltd.; Idemitsu Kosan Co. Ltd.; Japan Energy Corp.; Nippon Oil Corp.; Japan National Oil Corp.; SK Energy Co. Ltd.; GS Caltex Corp.
On Sept. 6, 2008, MinPet issued the Request for Proposal (RFP) for the project. Proposals much be submitted by a consortium comprising from one to two KSA applicants and from one to two IOCs. On Jan. 25, 2009, MinPet announced its decision to extend the deadline for submitting proposals from March 7, 2009, to Sept. 2, 2009.
MinPet anticipates selecting the successful applicant by the end of November 2009. Additionally, it projects that detailed design will be completed within 18 months after the license is awarded to the winning consortium. Moreover, the ministry expects construction to take an additional four years.
Although the specifics of the project should become more evident when the winning proposal is announced, MinPet stated the export refinery will be world-scale (ranging from 250,000 to 400,000 b/d) and have a semi- or full-conversion configuration. In addition, the facility may be integrated with a petrochemical plant and/or electric power plant. The cost may be in the $12-billion to $15-billion range, according to a 2007 news report.
The Jazan Refinery will be supplied with crude oil through a 30-year supply deal between Saudi Aramco and the project company based on international market pricing. Crude will be made available on a FOB basis at either Yanbu (for Arabian Light) or Ras Tanura (for Arabian Heavy).
MinPet expects the refinery to begin operations by 2015.