Samsung submitted the lowest bid on Luberef refinery
Saudi Aramco and Jadwa Investment are reviewing the final technical and commercial offers submitted by the engineering companies for the engineering, procurement and construction (EPC) contracts of the Luberef Yanbu Lube Oil Refinery Expansion.
Estimated to require $1 billion capital expenditure, this Luberef Yanbu Lube Oil Refinery Expansion project was tendered for the EPC contracts in two packages.
Luberef designed the Lube Oil Refinery Expansion project to:
- Add new capacities and processing units
- Revamp and upgrade existing facilities
The main package includes the greenfield units:
- New lube hydrocracker with 23,000 b/d capacity
- Catalytic iso-dewaxing and hydrofinishing unit
- Sour gas absorption
- Sulfur treatment complex and prilling units
The second package comprises the brownfield work in expanding:
- Vacuum distillation unit capacity increase from 26,000 b/d to 40,000 b/d
- Propane de-asphalting unit from 6.500 b/d to 12.500 b/d
- Asphalt capacity to 12,000 b/d
- Additional storage tanks
- Piping modifications to connect the new units
- New water cooling system with cooling tower
- The upgrade and extension of the electrical facilities
With 550,000 t/y of lube oil production capacity, this Saudi Aramco Lubricating Oil Refining Company (Luberef) project is to add high grade lubricants, the type-three oil, still imported in Saudi Arabia.
Jacobs and Samsung rewarded from their localization
One of the key factor of success for Jacobs had been to establish since 2008 in Saudi Arabia a local company with the acquisition of 60% of Zamel & Turbag Consulting Engineers (ZATE) to become Jacobs ZATE.
- Leiden in Netherlands, as global center of expertise for the lube oil refineries.
- Al Khobar in Saudi Arabia to design the infrastructure and provide services
- Mumbai in India to perform the detailed design
Saudi Aramco qualified 12 engineering companies with closing date at the end of June.
But because of the too short number of bidders, Saudi Aramco postponed the dead line to end of August and opened the opportunities for the bidders to submit offers ”in Kingdom” and “out of Kingdom”.
Four engineering companies submitted finally an offer.
- Hyundai Engineering & Construction from South Korea
- Saipem from Italy
- Samsung Engineering from South Korea
- Tecnicas Reunidas from Spain
Currently Saudi Aramco evaluates the details of the technical and commercial offers submitted.
Samsung is reported the lowest bidder with an “In-Kingdom” proposal aligned with Saudi Aramco “In-Kingdom EPC” (IK-EPC) requirements to increase the added value in Saudi Arabia.
The contract should be awarded on first quarter 2013 for completion in 2015.
In selecting Jacobs ZATE for the FEED and Samsung’s IK-EPC solution for the EPC contracts, for this Luberef Yanbu Lube Oil Refinery Expansion project, Saudi Aramco gives a strong signal to see the GES+ and the IK-EPC initiatives in place in 2013 to support the Saudi localization of its capital expenditure.