Takreer Ruwais Refinery Expansion


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Kathleen Bury, Contax project manager, looks at progress on the UAE's Takreer Ruwais Refineryl.

GCC Context

Despite the current economic climate, the planned GCC energy Capex landscape for 2009 to 2011 continues to show promise with c.$388bn worth of investments on the table.  The dominant sectors continue to include the refining and petrochemical sectors, with c.$75bn and c.$84bn respectively already planned for award by the end of 2011. The UAE supports a project Capex position of c.30% worth of the investment planned within the GCC energy space by 2010.

Strategic Overview

Abu Dhabi Oil Refining Company (Takreer) is planning to expand its 1982 inaugurated 400 000bpd refinery located at Ruwais by 417 000bpd, thus bringing the post expansion capacity to 817 000bpd. With an expected total project cost of approximately $11-12 billion, the estimated completion date for the project is Q2 2014. To achieve the capacity expansion target, UOP, Axens IFP Group Technologies, Shaw Stone & Webster, Du Pont, Stratco, Haldor Topsoe and CBI Lummus Global have already been chosen as technology providers for the plant.  It is anticipated that the project will produce unleaded gasoline, naphtha, liquefied petroleum gas (LPG), aviation turbine fuel (Jet A1), kerosene, propylene, gas-oil, bunker fuel, sulphur and diesel.

Despite recent delays to the project schedule, enabling the project owner to take advantage of the reduced input costs within the current market, the development of the TRREP project looks set to go ahead and satisfy a number of key strategic objectives, including the firm's plan to meet the previously planned growing local and global demand for clean fuels and chemicals as well as stringent product quality requirements and environmental legislation.

The refinery will be a key component of the ‘Plan Abu Dhabi 2030', which will involve the increase of oil production capacity from the current levels of c.2.8m/d to c.3.5mb/d within a 10-year timeframe. In line with this, Abu Dhabi plans to almost triple its refinery capacity from its current level of 485 000b/d.  The TRREP project and planned Fujairah refinery on the East Coast are two projects that are expected to drive this initiative.  The refinery will also feed downstream industries with liquid petroleum gas propane and naphtha, thus enabling Abu Dhabi to fully develop its petrochemicals industry in line with its chosen ‘verbund' method (integration of different petrochemical processes).

Scope

The project has been split into eight packages, including Process packages 1 & 2, offsite and utilities, as well as storage tanks and supporting infrastructure.

Challenges

Current economic and market dynamics are questioning the validity and schedules of many of the energy projects within the GCC.  With the recession in buyer economies, there is a desire for project owners to take advantage of perceived lower critical input costs and drive down EPC bid prices and project financing. As a result, key projects are being postponed and cancelled on a weekly basis.

Contax's quarterly analysis - included in the report ‘Impact of the Financial Situation on GCC Energy Project Workload' - looks to provide clarity about which projects have a 70%, between 40-70% and a less-than 40% probability of proceeding within the current economic climate, and which sectors and countries will experience the greatest impact. Following this analysis and as a result of the recent EPC PMS awards showing Takreer's commitment to the project, Contax believes that the TRREP project has a high probability of going ahead.

Contax opinion: Likelihood of project realisation - High. For more information and access to the full portfolio of Contax reports, please contact marketing@contaxgroup.com

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