November 6, 2008 at 2:09 pm #3333
UPDATE 1-Conoco, Aramco delay Yanbu refinery construction
Thu Nov 6, 2008 12:53pm EST
HOUSTON, Nov 6 (Reuters) – ConocoPhillips and Saudi Aramco said on Thursday they halted bidding on the construction of the 400,000 barrel per day joint-venture Yanbu refinery in Saudi Arabia, citing uncertainties in the financial and contracting markets.
The current bidding process to build the export refinery will be delayed to the second quarter of 2009 from the fourth quarter of 2008, the companies said in a press release.
“ConocoPhillips remains committed to working with Saudi Aramco to complete the Yanbu Export Refinery Project,” said Jim Mulva, chairman and chief executive of ConocoPhillips.
“We believe that this short delay will allow the markets to adjust from the current uncertainties and provide a stronger basis for the long-term success of the refinery.”
Conoco and Saudi Aramco said they will continue engineering and start-up plans for the project to ensure continuity while accommodating the delay.
Turmoil in world credit markets and tumbling crude oil prices have prompted some energy companies to halt more expensive projects or cut back on spending to preserve liquidity.
Yanbu, which had a price tag of $6 billion when it was announced in 2006, was one of four plants planned by the world’s top oil exporter to boost its refining capacity.
But equipment and labor shortages have pushed costs up globally in the energy sector, casting doubt on whether the projects would go through as planned. (Additional reporting by Janet McGurty in New York; Editing by David Gregorio and Andre Grenon)
November 6, 2008 at 2:17 pm #6467
You would think with crude demand concerns that the Saudi’s would push this forward? There is also some rumor that the delay is from not being able to get bidding pulled together – but this could just be from recent change in new Saudi leader for Oil sector. Some believe expanding internal refining capabilities during time high prices & shortages is not best interest – the other view is supported by recent huge drop in both price & demand levels with even China cutting back production, imports & taking early shutdown maintenance.
But this could also be little negotiating room to seek price drop on cost project? The Saudi’s were little steamed at past 2X increase on their refinery projects – given drop in commodities like steel & canceling of projects; it would give good reason to expect that outcome.
I believe Saudi’s Yanbu (COP coker tech) or Jebail (FW coker tech) project was to put in a Resid HDS for making some HFO alternate at 1%Sulf level?
That could give support to a proposed Gasan Calciner project in Saudi Arabia – which should be looking at Yanbu or Jebail for green anode supply? (Doesn’t seem likely to me).
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