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Jazan Project Contracts Signing

Source: www.gulfoilandgas.com 11/14/2012, Location: Middle East

Under the patronage of HRH Prince Muhammad ibn Nasser ibn Abdulaziz, Amir of the Jazan Area, a ceremony was held November 14, 2012, to sign the construction and procurements contracts of the Jazan Refinery and Terminal. The ceremony was attended by HE Ali I. Al-Naimi, Minister of Petroleum and Mineral Resources; HRH Prince Faysal T. Abdulaziz, Consultant at the Ministry of Petroleum and Mineral Resources; HE Abdullatif A. Al-Othman, Governor of the General Investment Authority (SAGIA); and Khalid A. Al-Falih, president and CEO, Saudi Aramco.

Located in the coastal part of the City of Bish, at the heart of Jazan Economic City, the Jazan Refinery will be built on an area of approximately 12 square kilometers. Upon completion of the refinery and terminal project in late 2016, the refinery will process 400,000 barrels per day of Arabian Heavy and Arabian Medium crudes to produce gasoline, ultra-low sulfur diesel, benzene and paraxylene.

Khalid G. Al-Buainain, senior vice president, Engineering, Capital & Operations Support, Saudi Aramco, signed the contracts with representatives of eight local and international construction and procurement companies; namely: Al-'Ali Al-Ajmi Group, Petrofac Saudi Arabia Ltd., Hyundai Saudi Arabia Ltd., Hanwa Engineering & Construction Corporation, JGC Corporation, Hitachi Plant Technologies Ltd., SK Engineering & Construction and Technicas Reunidas.

HRH Prince Mohammad N. Abdulaziz, Amir of the Jazan Area, said on this occasion: "Today we witness the realization of the Custodian of the Two Holy Mosques' strategic vision for the Jazan Area through this giant project implemented by Saudi Aramco. We hope this will be only the beginning for further projects in the Jazan Economic City. On my own behalf and on behalf of the people of the Jazan Area, I would like to express the utmost gratitude to the Custodian of the Two Holy Mosques, King Abdullah ibn Abdulaziz, for his attention and follow-up on the development of the Jazan Area, in order for it to take its appropriate economic place locally and regionally. I also commend the efforts the Ministry of Petroleum and Mineral Resources and Saudi Aramco exerted to launch this Project."

HE Ali Al-Naimi said: "The construction of the Jazan Refinery and Terminal comes in realization of the vision of the Custodian of the Two Holy Mosques, of guaranteeing balanced development of the Kingdom's various regions and providing the Jazan, Asir and Najran and other areas with their petroleum products requirements as well as contributing to the development of the Jazan area and its economic city."

HRH Prince Faysal ibn Turki ibn Abdulaziz, Consultant at the Ministry of Petroleum and Mineral Resources, described the project to build the Jazan refinery, terminal and high efficiency power plant as a supporting pillar for industrial activities in the Jazan Area. "This project, in this dear part of our beloved country, will act like a new base for conversion and supporting industries in the Kingdom and an additional source of employment opportunities for the area's inhabitants and will provide the City with a competitive edge through the provision of ample crude oil and energy supplies in this area," he said.

HE Abdullatif HE Abdullatif A. Al-Othman, Governor and Chairman of the Board of Directors, Saudi Arabian General Investment Authority stressed the importance of this critical project and its positive effects on the Jazan Economic City, as the project represents a cornerstone and a real attraction factor to draw more investments to the JEC and the area in general. "Work is underway to develop the required plans to accelerate the JEC's infrastructure construction works in order to attract industrial and service investments, provide appropriate job opportunities for the area's people and form the nucleus of diversified economic activities," he said.

Khalid A. Al-Falih elaborated that the Jazan Refinery and Terminal Project will provide petroleum products to meet the Kingdom's increasing refined product requirements as well as additional volumes to cover demand, particularly in the southern and western parts of the Kingdom, while exporting surplus volumes to the global markets.

"The Jazan Refinery and Terminal Project will provide more than 1,000 direct jobs in addition to 4,000 indirect jobs. A multiple-pier marine terminal will be constructed as part of the refinery to supply it with crude oil and support the refined products export operations," Al-Falih said.

He further indicated that, to guarantee the integration of these efforts, Saudi Aramco is currently developing a combined cycle power plant in the area to receive more than 90,000 barrels per day of vacuum residue from the Jazan Refinery and produce approximately 2,400 megawatts of electricity. The power plant will supply the refinery with hydrogen, water and electricity.

The Ministry of Petroleum and Mineral Resources had assigned Saudi Aramco to construct and operate this refinery, which will be wholly owned by the company and become a part of its refining network, to meet the Kingdom's energy requirements and export surplus products to the world markets.

The Ministry is working to assess an integrated project to produce titanium by utilizing ilmenite, which is locally available in the Qahma region and the coastal area of the southern region. The project includes a plant to produce 500,000 tons per annum (MTA) of titanium ore and 235 MTA of cast iron, another plant to produce 120 MTA of titanium dioxide, and a third plant to produce 20 MTA of titanium powder, in addition to a specialized plant to produce 50 MTA of high-tech final and semi-final titanium products used in desalination applications; oil, gas and chemical industries; the production of aircraft parts; organ transplants and many other industries. The project will also feature a plant to produce white pigments used as additives in the plastics industry, and another to produce zirconium oxy chloride used in manufacturing zirconium compounds and catalysts. The project units will be distributed between JEC and Yanbu' Industrial City to secure the highest possible level of industrial integration between the project units and other existing units. The estimated capital investment for this project is around SAR 5.2 billion. It will generate some 1,600 direct jobs.

The Ministry is also assessing a project to produce silicon in Jazan Economic City to utilize the quartz ore that is locally available in the Asir area. The project will produce 50 MTA of high-purity silicon, which is used as a feedstock for several industries.

The Ministry seeks to integrate this project with a Jazan City silicon polymer production project, which has an estimated initial cost of SAR 500 million and will generate approximately 300 direct jobs.

Both the Economic Cities Authority and the Ministry are also currently evaluating a project for shipbuilding and related activities such as ship repair and maintenance in Jazan City — on the coast of the Red Sea — which is crossed by about 20,000 ships each year.

The project includes dry-docks and ship building and services facilities with an estimated cost of SR 8 billion. The project will generate approximately 2,000 direct jobs.

To enable this industry, the Ministry is currently considering a project to produce iron sheets, which are used in shipbuilding and in manufacturing the equipment used in the petroleum, petrochemical and desalination industries. This project's estimated cost is SAR 4 billion and will generate about 1,200 direct jobs.

Saudi Aramco currently owns and operates four in-Kingdom refineries serving the local market, with a combined refining capacity of 1 million barrels per day. In addition, Saudi Aramco owns 50 percent interests in two other in-Kingdom refineries; namely, Saudi Aramco's joint refinery with ExxonMobil in Yanbu' (SAMREF) and with Shell in Jubail (SASREF). The two refineries have a combined refining capacity of over 700,000 barrels per day.

Additionally, Saudi Aramco has an interest in the Petro Rabigh 400,000 barrels per day refinery. This brings the total in-Kingdom refining capacity to more than 2 million barrels per day.

Saudi Aramco also pursues the construction of two 400,000 barrels per day refineries in Yanbu' and Jubail, both designed to process heavier crudes for export to external markets.

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