Saudi Aramco and Sumitomo re-issue PetroRabigh refinery contracts

Saudi Aramco and Japan's Sumitomo have re-issued tenders for the expansion of the $ 10 bn plus PetroRabigh integrated refinery and petrochemicals venture -- one of the biggest projects in the Middle East -- a source close to the company said.
The source told the contracts were tendered again because prices of raw materials such as steel and cement have fallen sharply in the last four to five months as a result of the global economic crisis and the joint venture partners want to "review the expansion plan to reduce costs."

Companies interested in pre-qualifying were asked to submit their interest by January 9, the source said.
The contracts in question cover the front end engineering and design and project management of the expansion and were originally due to have been awarded in June 2008. The bidding was later extended to October and was ultimately scrapped because only two contractors bid -- Italy's Tecnimont and Japan's JGC.

The two companies have been invited to submit new bids at a lower cost. The PetroRabigh project on Saudi Arabia's east coast involves upgrading Saudi Aramco's existing 400,000 bpd refinery at Rabigh to produce light oil products and construction of a petrochemicals complex.
The expansion involves increasing the capacity of the ethane cracker and the aromatics unit as well as construction of at least 15 chemical production plants.

PetroRabigh is a joint venture between Saudi Aramco (37.5 %) and Sumitomo Chemical (37.5 %).
The remainder is listed on the Saudi stock exchange.