Saudi Aramco, ConocoPhillips delay Yanbu project

Saudi Aramco, ConocoPhillips delay Yanbu' project

Dhahran, Saudi Arabia -Saudi Aramco and ConocoPhillips are to halt the bidding process for the construction of the planned 400,000 BPD export refinery at the Yanbu Industrial City in Saudi Arabia.The companies cited uncertainties in the financial and contracting markets.

The current bidding process requested bids to be submitted during December 2008, but the partners said they now expent that the project will be re-bid in the second quarter of 2009. The companies are to maintain joint engineering, start-up planning and other preparatory activities to ensure project continuity while accommodating the delay.

"ConocoPhillips remains committed to working with Saudi Aramco to complete the Yanbu Export Refinery Project," said Jim Mulva, chairman and chief executive officer, 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."

"Although the original schedule for the Yanbu Export Refinery Project will change, Saudi Aramco remains strongly committed to completing this important project with ConocoPhillips," added Abdallah S. Jum¹ah, Saudi Aramco president and chief executive officer. "We believe that a delay at this time will allow both the contracting and financial markets to better accommodate the project and will prove to be advantageous for the project company."

Saudi Aramco and ConocoPhillips, this May, signed a comprehensive Memorandum of Understanding (MOU) to conduct a detailed evaluation for the proposed development of a 400,000 barrel-per-day, full-conversion refinery in Yanbu. The refinery would be designed to process Arabian heavy crude and produce high-quality, ultra-low sulfur refined products that meet current and future U.S. and European product specifications. The project is targeted to startup in 2011.

The proposed project represents an opportunity for the world's largest producer of hydrocarbons and ConocoPhillips to work together to construct a state-of-the-art, full-conversion, heavy crude refinery to serve multiple markets with refined products.