State-owned hydrocarbons giant Saudi Aramco is looking to renegotiate a number of contracts for the construction of the Saudi Aramco Total Refining Co (Satorp) refinery in Jubail, Saudi Arabia.
News agency Reuters reported that six out of the 13 contracts for the 400,000 barrels per day (bpd) refinery, a joint venture with French oil company Total, are up for renegotiation as Aramco look to take advantage of the sharp drop in prices for raw materials that has occurred in the last few months.
Contractors close to the project reportedly told Reuters that the packages in question are aromatics, coker unit, hyfdro-treating, distillation conversion and plant utilities.
The move by Aramco is in line with other mega projects the company has that are currently under construction. In the past two months a number of high profile refinery and petrochemical projects in the Kingdom have been either deferred or delayed due to Aramco trying to drive down construction costs.
Story continues below
Advertisement
FEATURED COMMENT
In a fluid market, reimbursable contracting with provision for conversion to Lump Sum may be more optimum cost and timew
It is believed that the renegotiations will bring the cost of the Satorp refinery down from US$12 billion to $10 billion
Saudi Aramco declined to comment.
Page:
1
Readers' Comments
Epsilon Project Consulting (EPC) (Jun 2, 2009) Cherry Hill, NJ USA
Aramco re-negotiates contracts
In a fluid market, reimbursable contracting with provision for conversion to Lump Sum may be more optimum cost and timewise. Traditionally. the contracting philosophy in europe and Asia is Lump Sum irrespective of sellers', buyers' or uncertain markets!
Ahmed (Jun 1, 2009) Riyadh Saudi Arabia
I don't blame them
Why should Aramco not renegotiate? The price for raw materials is far lower now than it was in 2008.
US Chemical Safety Board video on an refinery explosion in the US
Site Map
FEATURED COMMENT
In a fluid market, reimbursable contracting with provision for conversion to Lump Sum may be more optimum cost and timew