Wednesday, 03 December 2008
updated 1 minute ago
06:37 UAE time

YOUR DIRECTORY /

Contax project snapshot: Yanbu Grassroot Export Refinery

by Kathleen Bury on Friday, 29 August 2008

Contax project manager Kathleen Bury, provides an insight into the project status of the Yanbu Grassroot Export Refinery.

The planned GCC energy Capex landscape for 2008 to 2010 continues to show signs of growth over the period 2005 - 2007, with around US$406 billion worth of investments already on the table.

The dominant sectors continue to include refining and petrochemical activities, with circa $99 billion and circa $79 billion respectively already planned for award by the end of 2010.

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Saudi Arabia maintains its position as the Capex King, with around 40% worth of the investment already planned within the GCC energy space.

However, following Contax's analysis of project postponements from 2007 to 2008, and within the first half of 2008, it is likely that the market will continue to see a considerable amount of award and execution schedule slippages.

Nevertheless given the GCC, and in particular Saudi Arabia's, commitment to solidifying its global ‘petrochemical and refining hub' position, it is anticipated that a number of key projects will be realised to help bridge the global demand and supply gap.

A major project that is expected to help Saudi Arabia achieve this goal is the Yanbu Grassroot Export Refinery (YER).

Background and strategic importance

Located within Yanbu 2, an extension of Yanbu Industrial City in the Western Province of Saudi Arabia, on the coast of the Red Sea and at the end of the East-West Petroline, a Saudi Aramco led joint venture is planning to build a flagship 400 000 bpd fully integrated grassroot export refinery.

In an effort to successfully develop and execute this project, Saudi Aramco has joined forces with ConocoPhillips under a current 50:50 joint venture partnership.

Contax understands that upon completion and operational start up, another JV company will be formed whereby each party will sell off a 15% stake in the refinery to the Saudi public through an Initial Public Offering (IPO) on the Saudi stock exchange, thus resulting in a tri-party ownership structure; Aramco 35%, ConocoPhillips 35% and Public Ownership 30%.

Since the project's announcement, and with the continuous escalation in project costs, there has been much discussion around the project economics, viability and partner commitment. However, on 16th May Saudi Aramco and ConocoPhillips both approved the continued funding for the development of the project.

Kathleen Bury, project manager, Contax

With over eight years of experience across market intelligence, consultancy, strategy and implementation, Kathleen is a part of the Growth Consulting practice at Contax. She has worked with FTSE 100 and other international companies in the United Kingdom, Middle East and Africa.

Kathleen has a strong background in the energy, utilities and construction sectors. You can contact her at This email address is being protected from spam bots, you need Javascript enabled to view it

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