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The $1 billion Luberef Yanbu Lube Oil Refinery on Bidding

Luberef stands for the Saudi Aramco Lubricating Oil Refining Company created by Saudi Aramco and ExxonMobil.

But since 2007, Luberef is a 70/30 joined venture between Saudi Aramco and Jadwa Investment to operate lube oil refineries in Yanbu and Jeddah.

With Jeddah and Yanbu refineries, the total Luberef actual capacity runs around 550,000 t/y lubricants, but high quality type-three oil still needs to be imported in Saudi Arabia.

So Luberef has decided to proceed to the expansion of its Yanbu refinery to cover this demand on high added value lubricants.

Capital expenditure is estimated at $1 billion for this new lube hydrocracker, offsites facilities and tanks farm.

In Yanbu the actual capacity is 280,000 t/y.

This expansion intends to nearly double this capacity with new:

 – Hydrocracker

 – Iso-dewaxing / Hydrofinishing unit

 – Sulfur Treatment complex

 – The extension of the vacuum distillation unit

– Additional storage tanks

 – The upgrade and extension of the electrical facilities

Jacobs Engineering in Leiden, Netherlands, is working on the Front End Engineering and Design (FEED) with the support of its:

 – Al Khobar office in Saudi Arabia for the infrastructure and services

 – Numbai office in India for the design of selected packages

Regarding the Engineering, Procurement, Construction phase, Luberef has decided to go for a single Lump Sum Turn Key EPC contract.

This key decision will fuel the competition between the pre-qualified bidders for this EPC contract:

 – Chiyoda (Japan) in JV with CTCI (Taiwan)

 – Daelim Industrial (South Korea)

 – Hyundai Engineering & Construction (South Korea)

 – JGC Corporation (Japan)

 – Saipem (Italy)

 – Samsung Engineering (South Korea)

 – Tecnicas Reunidas (Spain)

Due to the complexity of the process to produce lube oil, Luberef has given the opportunity to the bidders to quote on an “in Kingdom” and “out of Kingdom” basis, so that the winner will not have local content requirements to meet for this project.

This option should help the bidders to submit more aggressive offers.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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