KBR wins Jazan refinery contract from Saudi Aramco

By Anthony Dipaola
Bloomberg News

KBR Inc., a U.S. construction company, won an engineering and project management contract for a planned 400,000 barrel-a-day refinery at Jazan in Saudi Arabia from state oil producer Saudi Aramco.

Work is set to start on the project this month, KBR said in a statement on its website today. Aramco, the world’s largest crude oil exporter, is developing the $7 billion project to meet domestic demand for refined products and boost economic growth. The value of the KBR contract wasn’t given.

Middle East oil producers are expanding refinery and petrochemical capacity to meet domestic demand and provide industrial jobs. Aramco is building the refinery at a planned industrial area and port on its southwest Red Sea coast.

KBR will complete an engineering and design study for the refinery and port facilities, conduct the bidding process for building the plant and oversee construction, it said.

The refinery will cost about $7 billion, Amr al-Dabbagh, the governor of the Saudi Arabia Investment Authority, told the newspaper Riyadh in September. The facility will process 250,000 to 400,000 barrels of crude a day, he said.

The Jazan refinery is one of three new plants Aramco is building in the kingdom. Aramco is looking for partners to develop a 400,000 barrel-a-day refinery project at Yanbu on the Red Sea coast and is working with Total SA to build a $12 billion, 400,000 barrel-a-day refinery and chemical project at the Jubail industrial city on the Persian Gulf coast.

Aramco is developing Jazan alone after last year dropping bids from international companies to build the refinery.

ConocoPhillips pulled out of the Yanbu project last year and Aramco has since awarded some construction contracts.