Saudi partners rethink Ras Tanura project
23 March 2010
The effects of the World’s financial problems continue to impact on the investment plans of even the wealthiest economies. It has been reported this week that Saudi Aramco and Dow Chemical, partners in the massive Ras Tanura Integrated Project (RTIP), which originally represented an investment of some $20 billion, are rethinking their plans to shave off up to 25% of the cost of the project.
Ras Tanura Oil storage tanks
The partners are apparently looking at moving the project away from Ras Tanura along the Saudi Arabian coast to either Al Jubail or Ras Al Zaur where infrastructure already exists. It is thought the move could save the partners up to $5 billion in investment costs.
The area originally earmarked for the RTIP complex would have needed major infrastructure investment, including roads, harbour and other facilities. The Al Jubail complex, on the other hand, already has the infrastructure and is being expanded further. The initial RTIP complex was expected to be integrated with two massive feedstock facilities – a gas plant at Ju'aymah and the Ras Tanura refinery. It is no longer clear where the partners will source feedstocks when the complex moves up the coast.
Work on the front end engineering design of the complex is well underway with completion expected in September when the partners will be able to make their final investment decision by the partners. However the engineering of the project is not too far advanced to make the necessary changes to cut the overall investment costs although this would mean that completion and start up is sure to slip beyond the originally projected date of 2014.
A delayed start to the project is inevitable. Let us hope that the revised investment plan will not lead to shortcuts in the complex’ process safety systems.