Saudi Aramco on Wednesday signed several contracts with local and international contractors for the detailed Engineering, Procurement and Construction (EPC) of the Yanbu' Export Refinery Project at Yanbu' Industrial City, located in the Western Province of Saudi Arabia.
The newly incorporated Red Sea Refining Company will be responsible for the execution and operation of this landmark project.
EPC contracts for the major process units were awarded to:
- Tecnicas Reunidas (Spain) - the Coker package
- Saudi Services (Saudi Arabia) - High Voltage Electrical package
- SK Engineering & Construction Company (South Korea) - Crude package
- Dayim Punj Lloyd (Saudi Arabia) - Offsite Pipelines package
- Daelim (South Korea) - Gasoline and Hydrocracker packages
- Rajeh H Al-Marri (Saudi Arabia) - Onsite Pipeline Relocation package
- ENPPI (Egypt) - Tank Farm package
The Project Management Team advised that several remaining packages will be awarded over the next few months.
Early this year, the Project Management Team awarded the Site Preparation contract to Abdulrahman Al-Shalawi Establishment to ensure that the site would be ready for EPC contractors in the construction phase.
"Signing these contracts represents a critical milestone for the Yanbu' Export Refinery Project and will pave the way for many other major activities in the Yanbu' area," said Motassim Al-Ma'ashouq, Saudi Aramco executive director of New Business Development, who attended the signing ceremony together with representatives of the winning contractors.
The Yanbu' Export Refinery Project is one of a number of downstream projects that Saudi Aramco is pursuing, and unequivocally demonstrates the company's commitment to meeting future worldwide fuel demands. As part of its long-term strategy, Saudi Aramco is now making downstream investments following a massive upstream program that increased the company's crude oil capacity to 12 million barrels per day (bpd).
The Project will build a new "grassroots" refinery in Yanbu' Industrial City on a site of approximately 5,200,000 m². The new refinery will process 400,000 barrels per day (bpd) of Arabian Heavy crude and produce 90,000 bpd of gasoline, 263,000 bpd of ultra low sulfur diesel, 6,300 metric tons per day (mtd) of coke and 1,200 mtd of sulfur.
The new refinery will use existing Saudi Aramco facilities to receive crude oil and export the refined products. It will include refinery process units, utilities and interconnecting piping, associated feedstock and refined product storage, as well as offsite facilities necessary to support the safe and efficient operation of the refinery.
The signing of the EPC contracts is a culmination of a process that started in January 2006, when a team commenced the development of the base configuration and preliminary engineering, and initiated the selection process for the contractor and process technology licensors.
"We have taken many steps along the way to ensure the Yanbu' Project will pioneer many firsts for the Kingdom in the areas of detailed engineering, human resources development, and support of local equipment and material manufacturers. Approximately, 70% of the total project value will be spent within the Kingdom," said Fahad Al-Helal, the designated president and CEO of the Red Sea Refining Company.
Al-Helal confirmed the Project's commitment to local sourcing by stating that: "We have mandated that more than one million man-hours in detailed engineering must be executed in the Kingdom. That includes the full execution of the detailed engineering of the refinery's Sulfur Recovery Unit in the Kingdom, which is the first time a major process unit of this size will be fully executed in-Kingdom. In addition, several in-Kingdom lump-sum turnkey (LSTK) packages will be executed covering cross-country pipelines, communication and electrical work. We will also make maximum use of the Saudi work force during the detailed engineering and construction phases."
Al-Helal, explained that: "The winning international EPC contractors are committed to the hiring and training of many Saudi engineers in the fields of process and mechanical engineering at their worldwide offices during the detailed engineering phase. Among our main objectives are the development of young Saudi professionals, helping technology transfer to the Kingdom and maximizing local content in all goods and services used by the Project."
The Yanbu' project is expected to create numerous economic benefits, including business opportunities for local enterprises and new job opportunities, each of which typically creates five to six indirect job opportunities.