SPM Saipem Spa

By Kevin Baxter

LONDON--State-run Saudi Arabian Oil Co., or Saudi Aramco, has extended the deadline for submitting commercial and technical bids for a $2 billion clean-fuels project at its Ras Tanura refinery, according to people familiar with the project.

The initial schedule called for bids to be submitted to Saudi Aramco by May 11. However, people familiar with the project said this has now been extended to July 17 to give participating contractors more time to formulate bids.

One person from a large international contractor bidding on the contract said that due to the size and complexity of the project, this type of extension was expected.

The person added that the delay will likely result in the announcement of successful bidders being pushed back to the fourth quarter of 2016.

The long-awaited project, which has been delayed by at least two years, is aimed at providing Saudi Aramco with cleaner gasoline and diesel for domestic consumption and export. This will be achieved by rehabilitating the existing facilities at the 550,000 barrel a day refinery as well as adding new units to lower the sulfur and benzene content of both fuels.

The vast majority of work at the scheme has been split into two large packages and will be executed over a 36-month construction phase, meaning commissioning should start by early 2020.

The first package covers the engineering, procurement and construction, known as EPC, of a naphtha-processing facility at the refinery. The scope will include the EPC of all the main technical units that are planned for the scheme as well as power distribution and control systems.

The second package covers offsites and utilities at the project and will include the EPC of the all tanks, substations and buildings at the project.

A total of 11 international contractors have prequalified to bid for the work, with seven bidding on both packages and a further four on the second package.

The seven bidding on both are South Korea's Daelim Industrial Co., Hyundai Engineering & Construction Co., Samsung Engineering Co. and GS Engineering & Construction as well as Japan's JGC Corp., Italy's Saipem SpA and Spain's Tecnicas Reunidas SA.

The four contractors bidding solely on the second package are South Korea's Daewoo Engineering & Construction Co. and Hanwha Engineering & Construction as well as India's Larsen & Toubro Ltd. and the London-listed Petrofac.

Ras Tanura is wholly owned by Saudi Aramco and is the largest oil refinery in the Middle East. It is situated on the Persian Gulf coast in eastern Saudi Arabia.

Saudi Aramco wasn't available to comment when contacted by The Wall Street Journal.

Write to Kevin Baxter at Kevin.Baxter@wsj.com

(END) Dow Jones Newswires

May 17, 2016 08:13 ET (12:13 GMT)

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