Contract awarded in $12bn Saudi project

Saudi Aramco and French oil giant Total have awarded a construction contract for its $12 billion joint venture refining and petrochemical facility in Saudi Arabia, the companies have said.

The deal comes a day after Kuwait scrapped a deal to form a $17.4 billion petrochemical joint venture company with Down Chemical, the Saudi Gazette reported on Tuesday.

The contract was an indication of the companies commitment to push through the project, the companies added.

The contract was awarded to the Saudi Arabian based contractor, Contracting and Construction Enterprise Ltd which will develop about 600 hectares with basic infrastructure allowing for the accommodation of 30,000 workers, temporary offices, and 3,000 personnel.

Construction of all facilities is to be finished by the end of 2012, with commercial operations of the facilities set for March 2013.

Across the region, joint state and private ventures in refining, petrochemical and power still looking for finance may be delayed and see costs rise as they wait for credit conditions to ease.