State oil giant Saudi Aramco has extended the deadline to bid for construction of a new refinery in Jizan by one month, industry sources said.
The refinery in Jizan, an underdeveloped province bordering the kingdom's southern neighbour Yemen will have a capacity of 400,000 barrels per day (bpd). Far from Saudi's oilfields on the Gulf coast, the refinery is part of a crucial plan by Aramco, increasingly looking to expand its downstream activities, to raise its domestic refining output to 3.5 million bpd by 2016.
Bidding is now due to close in mid-September after some contractors asked for an extension to prepare their engineering, procurement and construction (EPC) packages, industry sources said. Separately, bids for expansion of an oil lubricants refinery in Yanbu, the Saudi Aramco Lubricating Oil Refining Co (Luberef), are due to be submitted on September 1.
Luberef is 70 percent owned by Saudi Aramco while Saudi Jadwa Industrial Investment owns the remaining 30 percent in Luberef, after US oil firm ExxonMobil sold its stake.Luberef, established in 1976, produces around 550,000 tonnes per year of oil lubricants at its two refineries on the kingdom's Red Sea coast at Jeddah and Yanbu.
As a result of the expansion in the Yanbu refinery, which now has a capacity of 280,000 tpy of oil lubricants, a type of base oil that is new to the Gulf region will be produced.US Jacobs Engineering conducted front-end engineering and design (FEED) for the expansion of the refinery, whose capacity will double once the project is completed in 2015. An executive at Luberef told Reuters in 2010 the cost of the project is expected to be around $1bn.
Copyright 2012 ArabianBusiness.com - ITP Digital Ltd.Provided by Syndigate.info, an Albawaba.com company. All Rights Reserved.
(Originally published August 3, 2012, on ArabianBusiness.com.)