Rabigh II partners ask bidders to wait
Khobar, April 11, 2012
State oil giant Saudi Aramco and Japan's Sumitomo Chemical have told companies bidding to expand their joint petrochemicals complex in Saudi Arabia they need more time to pick contractors, industry sources said.
The partners have asked engineering companies bidding for the Rabigh II expansion contracts to extend the validity dates from mid April to the end of the month.
They have also asked for bids for another part of the complex to be extended to May 12, sources said.
Aramco and Sumitomo did not give any other indication on the status of the project for which contract awards had been expected earlier this year. A second feasibility study needs to be completed before finalizing the joint investment decision.
"We are very much committed," Abdulaziz Al-Judaimi, Aramco's vice president for chemicals, told reporters in March. "The next steps ... are to look at the project's economics and finalize a decision for the investment. So we are not far (away from a decision)."
Under Rabigh II - which is expected to cost $6-$8 billion - the existing ethane cracker would be expanded as well as a new aromatics complex using around 3 million tonnes per year of naphtha and various units of petrochemical products of higher value and specialty including EPR (ethylene propylene rubber), Methyl Methacrylate (MMA).
Industry sources in Saudi Arabia have said Aramco would press ahead with the project as it is a key part of Saudi plans to diversify its energy mix and maximise profits from downstream activities.
The original bids were valid for 180 days from October last year when proposals were due in for 10 packages of the expansion. - Reuters