JEDDAH: Eight Saudi companies and six foreign firms have been qualified for the bidding round of the export-oriented Jazan refinery project, which will have a capacity to produce 250,000 to 400,000 barrels per day, Minister of Petroleum and Mineral Resources Ali Al-Naimi announced yesterday. The refinery is expected to start operations in early 2015, Al-Naimi told the Saudi Press Agency. The minister said companies participating in the project would benefit from tax breaks of up to 50 percent.
He said the qualified companies were expected to present their offers on or before Sept. 2, 2009, adding that the winner would be announced by the last quarter of 2009. The eight Saudi companies were selected from 15 applicants. Custodian of the Two Holy Mosques King Abdullah announced the plan to establish the refinery in November 2006, when he visited the southern Jazan province as part of an inspection tour, to achieve balanced growth in all parts of the country.
He said the ministry had set up a team of experts to study the project. “In light of that study we found that it is economically viable and we identified a location for the refinery inside the Jazan Economic City (JEC) to become one of its pillars,” he said.
Spelling out the incentives, Al-Naimi said the refinery would be provided with the required amount of crude while investors would get a 15 percent tax cut on the paid-up capital, 15 percent tax cut on the annual cost of training Saudis and 50 percent tax cut on annual salaries of Saudis.
Al-Naimi said the government would build marine facilities to supply crude and other liquid products, including a floating wharf to unload crude from oil ships and a jetty of containers to collect crude.
The JEC, one of the four giant economic city projects being implemented by the Kingdom, has so far attracted SR115 billion ($30.67 billion) in investments.