NEW: The Top 10 GCC downstream projects

Over $70 billion worth of regional projects have been green lit

Saudi Arabia, Qatar and the UAE dominate the project spend pipeline for refining and petrochemical projects in the GCC.
Saudi Arabia, Qatar and the UAE dominate the project spend pipeline for refining and petrochemical projects in the GCC.

$70 billion worth of regional projects greenlit and underway spells out an opportunity bonanza for savvy suppliers and engineering partners.

Many downstream projects in the Middle East have been completed and started commercial operations, but there are still ongoing opportunities in the region.

Refining and Petrochemicals Middle East presents the biggest and brightest of current business opportunities for contractors and services providers.

With total investment exceeding US$70 billion, these projects are set to boost the production capacity of the regional players.

The majority of these projects are located in Saudi Arabia, Qatar, Kuwait and the UAE, but projects in Oman and Bahrain also make the list.

NUMBER ONE: Petro Rabigh: Phase two

Rabigh Refining and Petrochemical Company (Petro Rabigh) is the first integrated petrochemical and refinery project in the region. The first phase of the project was inaugurated in 2009.

The second phase of Petro Rabigh is expected to cost between US$6bn to $8bn according to Khalid Al Falih, CEO of Saudi Aramco.

The second phase will boost the production output of the first integrated refinery and petrochemicals complex in the Kingdom.

The Saudi Arabian and Japanese joint venture partners behind the project are prequalifying companies for its planned phase II expansion, which involves the expansion of the ethane cracker to handle an additional 30 million cubic feet per day of ethane feedstock, along with a new aromatics complex with a capacity of 3 million t/y of naphtha as well as a higher quality of petrochemical products.

NUMBER TWO: Saudi Aramco Dow Chemical Poject
The iconic project between Saudi Aramco and Dow Chemical represents an investment of almost $20bn, according to the CEO of Saudi Aramco, Khaled Al Falih.

The new integrated project has witnessed many delays due to a relocation - initially planned in Ras Tanura. Due to land quality and other technical issues, the project was relocated to Jubail.

The project has suffered a few setbacks, but it now looks like it is ready to move forward.

In recent interview Abdulaziz Al-Judaimi, vice president of chemicals at Saudi Aramco said that they expect the completion of the FEED study for the project in the first half 2011.

Sources close to the project said that Saudi Aramco is talking to contractors to find out costs, as it looks towards the construction phase of the huge complex.

NUMBER THREE: Yanbu export refinery
Despite the withdrawal of the US supermajor ConocoPhillips from the $10bn Yanbu Refinery, Saudi Aramco is going ahead with the project.

The company awarded contracts for the planned 400 000 barrel-a-day Yanbu refinery on the western coast to companies including Tecnicas Reunidas SA and Daelim Industrial Co.

Tecnicas Reunidas will do work on the coker unit, Daelim will build the gasoline and hydrocracker units and SK Engineering & Construction Co. will work on the crude unit, Saudi Arabia’s state oil company said in a statement.

Tecnicas seperately announced it won a $700 million contract. Punj Lloyd Ltd. also won a contract to work on offsite facilities, while local contractors will install electrical lines, pipelines and storage tanks, Aramco said, also revealing that more contracts may be awarded over the next few months.

NUMBER FOUR: Qafco 5 and 6 expansion
The fifth and the sixth expansion projects of Qatar Fertilizer Company (Qafco) are set to put the company as the largest ammonia and urea producer in the world.

The production capacity of Qafco urea from the six units of the company will reach 5.6million tonnes per year.

The project is progressing as scheduled and set to start commercial production of Qafco 5 during the first half 2011, followed by Qafco 6 in 2013.

“A proof of the leadership status of Qafco is the emergence of new investment activities in progress in the fertilizers sector in Qatar, with an approximate invested capital of US$4bn,” said Khalifa Al-Sowaidi, managing director of Qafco.

NUMBER FIVE: Laffan Refinery: The second expansion
After starting up the first condensate refinery in the region in 2009, Qatar Petroleum (QP) has launched the second phase of the project. The new expansion project will double the capacity of the refinery to 296 000bpd by 2015.

The cost of the expansion of the second phase is estimated to be at around US$900m, which is equal to the first phase project. The refinery utilises the field condensate produced from the Qatargas and RasGas facilities.

It consists of process units including utility systems, distillation unit, naphtha and kerosene hydrotreaters, a hydrogen unit and a saturated gas plant producing naphtha, kerojet, gasoil and liquefied petroleum gas (LPG).

The first phase of the refinery has a production capacity of 61 000 bpsd of naphtha, 52 000 bpsd of kerojet, 24 000 bpsd of gasoil and 9000 bpsd of LPG.

NUMBER SIX: Borouge: The third expansion
The third expansion of Abu Dhabi Polymers Company (Borouge) aims to triple the production capacity of polyolefins to 4.5million tonnes per year by 2013.

The company has awarded all the contracts related to the construction of the project. In May 2010, Borouge signed signed a US$1.075 billion contract with The Linde Group for the construction of a 1.5 million tonnes per year (t/y) ethane cracker.

In June, the company signed three major Engineering, Procurement and Construction (EPC) contracts valued at approximately US$2.6 billion, for polyolefins units and utilities and off-site facilities with Tecnimont, Samsung Engineering and Hyundai Engineering and Construction.

NUMBER SEVEN: Jazan Refinery
The Jazan refinery is another project developed by Saudi Aramco. Sources say that the refinery will cost $7bn and has a production capacity of 400 000 barrels per day (BPD).

The facility is located in Jazan, on the Yemeni border. KBR won the FEED and project management services contract for the refinery and Marine Terminal Project.

The Jazan project was initially planned to become the first independent oil refinery in the Kingdom. However, due to only two bids being submitted, Aramco took over management of the development in February 2010.

NUMBER EIGHT: SABIC and ExxonMobil Elastomers Project
The estimated $5bn project aims to produce more than 400 000 tonnes of rubber, thermoplastic specialty polymers (EPDM/TPE, TPO, Butyl, SBR/PBR) and carbon black to serve emerging local and international markets in Asia and the Middle East.

The two partners announced recently that the project has reached an advanced stage in front-end engineering and design. The project will be located in Jubail Industrial City and the contracts will be awarded soon.

NUMBER NINE: Octal Petrochemicals: Phase two
The Salalah-based company is boosting its capacity to be the largest PET producer in the world by 2012. The privately owned, Oman-based manufacturer opened a 400 000 metric tonnes per year PET resins and sheet packaging facility in the southeast port city of Salalah in January 2009.
Phase two of the complex, which will be commissioned from June 2012, will add an additional 527,000 m/t of production. The expansion project of OCTAL is one of the few to have achieved financial close in 2010, not only in Oman but in the GCC.

NUMBER TEN: Bahrain Refinery Upgrade
Bapco aims to increase the production capacity of the Sitra refinery from its current 267 000bpd.

“The refinery master plan envisages the expansion of the refinery to some capacity between 350 000 to 500 000 bpd,” said Faisal Al Mahroos, CEO of Bapco.

“The feasibility study for the project has been completed internally last year, and since then a reputed international company is assisting the Bapco team in formulating the preferred configuration and the optimum size of the refinery. Different upgrading technologies are under consideration,” he added.

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