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Riyadh Refinery Clean Transportation Fuel at bidding stage

Saudi Aramco to award Clean Fuel project at year end

In April 2011, Saudi Aramco had selected Foster Wheeler and A. Al-Saihati, A. Fattani & O. Al-Othman Consulting Engineering Co., (SOFCON) for the Front End Engineering and Design (FEED) of the Riyadh Refinery Clean Transportation Fuel project.

In parallel of the FEED contract, Foster Wheeler and SOFCON had been awarded the Project management consultancy services (PMC) contract.

These two contracts could be signed with Saudi Aramco as in parallel, Foster Wheeler and SOFCON had committed to meet all the requirements of the General Engineering Services plus (GES+) contracts requested by Saudi Aramco at pre-qualification stage for engineering services.

Through the GES+ contracts, Saudi Aramco intends to favor the local content in Saudi Arabia for engineering work such as feasibility studies, FEED, detailed design, project management and procurement services.

For the foreign companies interested in being pre-qualified by Saudi Aramco, it means in practice to establish joint venture, consortium or make acquisition of a local contractor and to put in place a program to train local engineers and transfer engineering work to the local office in Saudia Arabia.

In this context, Foster Wheeler and SOFCON perfomed the FEED work in their Al Khobar office in the Eastern Province, Saudi Arabia.

Implemented step by step, the GES+ contract is now mandatory for an engineering company to be pre-qualified for bidding any engineering services job for Saudi Aramco.

While originated by Saudi Aramco, Sabic is also adopting the same pre-qualification process.

In June 2012, Foster Wheeler, SOFCON, and Saudi Consolidated Engineering Company – Khatib & Alami (SCEC K&A) signed in consortium a five year GES+ contract with Saudi Aramco.

Riyadh Clean Fuel: $1 billion upgrade refinery project 

The Riyadh Refinery Clean Transportation Fuel project is part of the Saudi Aramco scheme to revamp and upgrade all the refineries in the Kingdom in order to comply with international standards regarding the reduction of CO² and sulfur emissions out of the diesel from actual 330 parts per million (ppm) to 10 ppm, and to reduce the level of benzene in gasoline.

In this context, the Riyadh Clean Fuel project is the first brownfield project of that size to be awarded by Saudi Aramco.

Then should come similar Clean Fuel projects for the other refineries in Ras Tanura, Rabigh and even Yanbu.

For the Riyadh refinery, Foster Wheeler and SOFCON estimated the Clean Fuel project around $700 million – $1 billion.

Considering that the Riyadh refinery has a capacity of 120,000 b/d “only”, this first brownfield project gives an idea to the engineering companies of the whole Clean Fuel scheme undertaken by Saudi Aramco in the Kingdom.

This brownfield program coming on the top of the multiple greenfield oil and gas projects mushrooming around the country, it justifies for the foreign engineering companies servicing in Saudi Arabia to consolidate their local market leadership in building local partnership to meet the GES+ initiative.

According to the FEED performed by Foster Wheeler the Riyadh Refinery Clean Transportation Fuel project should include:

 – 4 new processing units for the isomerisation, the naphtha splitting, the sulfur guard-bed, and the diesel hydrotreater reactor

 -2 debottlenecking operations on the hydrocracker and the gas concentration unit

 – Replacement of crude and vacuum distillation tower internals

Based on this scope of work, Saudi Aramco issued the call for tenders on mid summer 2012 for the EPC with a deadline for the submission of the bids on October 20th, 2012.

Saudi Aramco expects eight EPCs in competition

From the qualification process conducted by Saudi Aramco with the support of Foster Wheeler and SOFCON, eight companies are expected to bid for the engineering, procurement and construction (EPC) contract:

 – Daelim Industrial from South Korea

 – GS Engineering & Construction from South Korea

 – Hyundai Engineering & Construction from South Korea

 – Petrofac from UK

 – Samsung engineering from UK

 – SK Engineering from South Korea

 – Technip from France

 – Tecnidas Reunidas from Spain

With the tenders to be submitted by October 20th at the lattest, Saudi Aramco and Foster Wheeler- SOFCON are planning to award the engineering, procurement and construction (EPC) contracts for the Riyadh Refinery Clean Transportation Fuel project at the end of the year.

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