Saudi Aramco invites bids for $400mn EPC contract

Saudi oil giant floats tender for a new fuel storage facility for oil products at the port of Duba, on Tabuk's Red Sea coast

The contract entails the installation of storage tanks, loading and unloading facilities, pumps and associated facilities at a site close to the port’s existing bulk terminal and storage depot.
The contract entails the installation of storage tanks, loading and unloading facilities, pumps and associated facilities at a site close to the port’s existing bulk terminal and storage depot.

Saudi Aramco continues its efforts to upgrade fuel storage and distribution infrastructure in the west of the kingdom, floating a tender for a major new fuel storage plant.

Bids have been invited by Aramco for an estimated $400mn engineering, procurement and construction (EPC) contract for a new tank farm for oil products at the port of Duba, on Tabuk’s Red Sea coast.

The contract entails the installation of storage tanks, loading and unloading facilities, pumps and associated facilities at a site close to the port’s existing bulk terminal and storage depot – which comprises a single berth with capacity for receipt and storage of gasoline and diesel.

Pre-qualifiers are reported to include the local Arkad, Gulf Consolidated Contractors and Nesma & Partners, Larsen & Toubro (L&T) and Punj Lloyd, both from India, China Petroleum Pipeline Bureau, UAE-based Dodsal and Dutco McConnell Dowell, Egypt’s Enppi, Japan’s JGC, Cyprus-based Joannou & Paraskevaides, Italy’s Saipem and Turkey’s Tekfen.

Production of oil products in the west of the kingdom increased in 2015 with the commissioning of the 400,000 bpd Yasrefrefinery at Yanbu, and further expansion of the industrial city’s refining capacity is envisaged.

Aramco’s effort to upgrade the infrastructure for the supply of such products to the west’s growing cities – delayed somewhat by the revenue downturn from mid-2014 – appeared to take major steps forward during the second half of 2016 with the flotation of tenders for several midstream schemes. However, the majority of contracts have yet to be awarded.

EPC bids were submitted during the third quarter for a long-awaited project to build a 300,000 barrel bulk plant in the north-central Hail governorate storing gasoline and diesel for distribution to the remote inland region’s growing population. Contractors had initially been invited to express interest more than two years previously.

Turkey’s Gama, JGC, L&T, Nesma & Partners, China’s Sinopec, Italy’s Techint and Tekfen were pre-qualified to bid.

Offers had also been received during the second quarter for the contract to install a 220km pipeline linking the Qassim depot to the south with Hail, to which fuel is currently transported by truck – with Tekfen reported to be the frontrunner.

Each package had been valued at around $300mn but Aramco is expected to re-tender both contracts following changes to the scope. Bids remain under evaluation for an EPC contract also tendered during the third quarter covering a new bulk plant in North Jeddah.

However, plans to improve fuel supplies to the kingdom’s second city have made more progress than those for Hail – with Tekfen awarded in August the EPC contract for a new gasoline and diesel fuel pipeline linking the city with Yanbu further north.

Added incentive was provided by Aramco’s decision last year to close the ageing 78,000 bpd Jeddah refinery by early next decade rather than rehabilitate it.

However, a flurry of such projects put out to bid around the middle of last year has suffered delay, as the lengthy hiatus between original conception and the move towards execution has induced substantial revisions to the projected scope.

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Oil & Gas Middle East - September 2020

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