Aramco refinery hit by delays

Contract dispute with builders said to have led to hold up

The facility had been scheduled for 2016 completion.
The facility had been scheduled for 2016 completion.

A contract dispute between Saudi Aramco and South Korean firm SK Engineering & Construction Is delaying the energy giant’s Jizan oil refinery in southwest Saudi Arabia, news agency Reuters has reported.

There have been reports in the Gulf business media that the disagreement – the subject of which is compensation for change orders – had led to the contract being terminated.

However, sources told Reuters that this was not the case. Other contractors on the 400,000 barrel per day project have faced similar problems with compensation for losses incurred because of design changes, the source added.

The refinery, which is valued at $6bn to $7bn had been slated for completion in the last quarter of 2016, but with infrastructure delays, that is likely to be pushed back by another six to twelve months.

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