25 August 2009

Global perspectives: New oil refinery in Saudi Arabia

By Cris Whetton

Saudi Aramco and France's Total have agreed to construct an oil refinery in Jbail, Saudi Arabia, by 2014. The two companies have established a joint venture, SATORP, and have selected France's Technip and Spain's Tecnicas Reunidas as leading subcontractors.

The full-conversion refinery will have a capacity of 400,000 barrels per stream day of Arabian heavy crude oil. It will maximize production of diesel and jet fuels, and will also produce 700,000 metric tons per year (t/y) of paraxylene, 140,000 t/y of benzene, and 200,000 t/y of polymer-grade propylene. The overall project cost now stands at $9.6 billion. The Jbail project came in at $12 billion in 2008, but the global economic decline led to a drop in prices for equipment and construction material. Saudi Aramco Total Refining and Petrochemical Company, or SATORP, is a Saudi Joint Venture Company participated by the Saudi Arabian Oil Company (Saudi Aramco), 62.5%, and Total France, 37.5%.

Under the contract, Tecnicas would construct crude and hydrotreating units in an estimated $1 billion subcontract. Technip’s scope for the project covers the engineering, procurement, and construction of two contracts: the hydro and catalytic cracking conversion process units; and some of the utility units as well as the interconnecting network and process control system of the entire refinery. Technip’s operating centers in Rome and Paris, with assistance from the Group’s organization in the Middle East, will execute the contracts, scheduled for completion during the second quarter of 2013. They follow Technip’s successful execution of the front-end engineering design for this refinery.

Meanwhile, Sweden’s Alfa Laval received two orders for Alfa Laval Packinox heat exchangers from Petrobras in Brazil. The total value is $7.8 million (SEK 55 million). Delivery is on tap for 2011. They will use the Packinox heat exchangers for heat recovery within a reforming process.

In Sweden and Brazil, Skanska won a contract to construct the interconnections of a gasoline hydro-desulphurization unit in the Alberto Pasqualini Refinery (REFAP), in Canoas, Porto Alegre state. The contract amount is $100 million. REFAP is 70% owned by Petrobras and 30% owned by Repsol. Skanska has worked at the same refinery in the past, building a sulphur recovery unit and a hydrogen generation unit, and has an ongoing contract to build a gasoline hydro-desulphurization unit. The scope of the contract includes: partial engineering, construction, procurement, electromechanical assembly, tests, and commissioning. Work should begin later this month and should wrap up within 24 months.

Cris Whetton is InTech’s European correspondent.