RIYADH (Reuters) – Saudi Arabia will issue a tender for bids for a new oil refinery in the southern province of Jizan in September, Saudi Al-Eqtisadiah newspaper reported on Sunday.
The tender for the 250,000 to 400,000 barrels per day (bpd) refinery has been delayed several times, from initial plans to open bidding in the second quarter of 2007.
Spiralling costs have cast doubt over the viability of new oil refineries worldwide and industry observers have been skeptical over the Jizan plan as it is a long distance from crude production facilities.
The project is part of government plans to give an economic boost to the impoverished region of Jizan in the far south, on the Red Sea coast.
The Saudi Petroleum and Mining Ministry will issue the request for proposals for the refinery on September 6 to companies that it has vetted as qualified to build and operate the refinery, the newspaper said.
The oil ministry said last year that 8 Saudi and 43 international companies had been pre-qualified to take part in the Jizan tender. State oil firm Saudi Aramco is listed as one of the prequalified international companies.
International companies interested in building the refinery must submit their bids in partnership with one of the qualified local companies.
The government unveiled plans to build the refinery in 2006 and said it would be 100 percent privately owned with an initial public offering taking place once the refinery was deemed viable.