RIYADH, 21 August 2007 — Saudi Arabia said yesterday it would invite bids for the building and operation of the planned Jizan oil refinery in the fourth quarter and denied reports that state oil firm Aramco had been asked to help do the job.
The refinery is to be part of an “economic city” in the region of Jizan in the far south, on Saudi Arabia’s Red Sea coast. The plant will have the capacity to process 250,000 to 400,000 barrels per day and the Kingdom wants the plant to be privately owned.
“The ministry will offer the documents for the project to the eight Saudi companies qualified in partnership with international oil companies,” Yahya bin Abdel Karim Al-Zaid, an adviser to the Ministry of Petroleum and Mineral Resources, said in a statement carried by the official SPA news agency.
“This is expected in the fourth quarter of this year,” said Zaid, who is overseeing the Jizan project, adding that plans for the refinery were on schedule.
The London-based Middle East Economic Digest (MEED) reported earlier in August that the oil ministry had asked Aramco to help implement the project after struggling to attract interest from international companies to run the Jizan refinery.
Earlier this year, US oil firm Chevron Corp. ruled out taking a stake in the project, saying it did not make strategic sense for the company.
But Malaysia’s Petronas last week said it was keen to participate.
Top oil exporter Saudi Arabia in May prequalified eight local companies for bidding to work with international companies on the project.
The Kingdom has announced plans that would boost refining capacity at home to 3.8 million barrels per day (bpd) from around 2.1 million bpd last year. Jizan is one of four new refineries the kingdom plans to build.
It has already signed deals worth $12 billion for two new refineries — one with France’s Total at Jubail and one with US ConocoPhillips in Yanbu.
They will produce 800,000 bpd of products by the end of the decade.
A third refinery at Ras Tanura, with a capacity of 400,000 bpd, is intended to supply the rapidly growing domestic fuel market, Aramco said in June.