Saudi Arabia's state-owned Saudi Aramco has been charged with constructing the proposed 250,000-400,000 barrels per day (bpd) Jizan refinery by the national government. The tender for the project, which was offered last year, attracted only two bids. Both bids were made by local oil companies. Subsequently, former Aramco executive Sadad al-Husseini came out in public stating that neither of the two bidders were in a position to execute a project of the size of Jizan. The decision that Aramco will build the Jizan refinery makes it more likely that it will be completed by its scheduled start-date of 2015.
The decision to build a refinery in Jizan was first announced back in 2006 as part of the Jizan Industrial City project. The project aims to industrialise the undeveloped Jizan province in south-western Saudi Arabia, close to the border with Yemen. The start date for the refinery project has has already been put back a number of times, pushing the completion deadline from 2013 to 2015 - at which is currently stands.
An incredible 42 international oil companies and eight Saudi Arabian firms were pre-qualified to bid on the tender for the project, however, only two bids were finally submitted for the project, one from a consortium of Saudi Arabian companies: Tasnee, Advanced Refining and Petrochemicals Co (ARPC) and Nama Chemicals Group; and the other from Swedish-registered Corral Petroleum - which is owned by Saudi businessman Mohammed al-Amoudi. The Saudi oil ministry has since stated that the project's importance made it necessary for Aramco to execute and fully fund the construction of the refinery as a means of guaranteeing its completion by the set date.
At present, the Saudi Arabian refining sector is dominated by Aramco, which in 2008 owned a total capacity of around 1.49 million bpd (equivalent to 71.4% of the total market share). Aramco owns four separate refineries outright: Ras Tanura, Jeddah, Riyadh and Yanbu. The firm also owns equity shares in a further three: Rabigh, Sasref and Samref. In addition to this, Aramco makes up one part of a joint venture in two new refineries which are currently under construction at Jubail and Yanbu (SATORP).
Saudi Arabian refining capacity had risen to around 2.1 million bpd by the 2008 year-end, according to the BP Statistical Review of World Energy, published in June 2009. An ambitious Aramco development plan calls for $20 billion of further investment to increase domestic refining capacity to more than 3 million bpd and international holdings by at least 1-2 million bpd by the year 2011.