Saudi Aramco extends deadline for refinery bids

State oil giant Saudi Arabian Oil Company (Saudi Aramco) extended the deadline of the bidding for the construction of a 400,000 barrel per day (bpd) refinery in Jizan until mid-September. Jizan is an underdeveloped province in the south, far from Saudi’s oilfields on the Gulf coast. The refinery is thus a crucial part of Aramco’s plan to expand its downstream activities in order to raise its domestic refining output to 3.5 million bpd by 2016. A separate bidding for the expansion of a lubricants refinery in Yanbu, for the Saudi Aramco Lubricating Oil Refining Co. (Luberef), ends on September 1. Seventy percent of Luberef is owned by Saudi Aramco and the remaining 30% is owned by Saudi Jadwa Industrial Investment. Luberef was established in 1976 and annually produces around 550,000 tons of lubricating oil at its two refineries on the kingdom’s Red Sea coast at Jeddah and Yanbu. After the expansion in the Yanbu refinery, which has a capacity of 280,000 tons per year (tpy), the refinery will produce a type of base oil that is new to the Gulf region. Expansion of the Yanbu refinery is expected to be completed in 2015 at an estimated cost of US$1 billion. (August 3, 2012)