Aramco extends Yanbu bid process after Conoco exit

State oil giant Saudi Aramco has asked for more time from bidders for deals to build its Yanbu refinery after partner ConocoPhillips pulled out, industry sources said on Thursday.

Aramco indicated on Wednesday it would build the 400,000 barrels per day (bpd) plant despite Conoco's withdrawal, and industry sources said the Saudi firm was already talking to new partners.

Aramco sent a letter to contractors stating that it or a wholly-owned Aramco subsidiary would proceed with the project, an industry source said on Thursday.

The state giant asked engineering firms to extend the validity by 60 days of bids they submitted in January in a tender for contracts for the Yanbu project, the sources said.

"They need more time to assign the contracts, they need to be sure the proposals are still valid with the same conditions, the same prices," said one source on condition of anonymity.

Contracts would now be awarded in July at the earliest if the project goes ahead, the source said.

The proposals were valid for 120 days from January 26, the day when bids were due in for five packages at the plant.

Bidders have to respond by April 23 as to whether they accept Aramco's extension request.

The refinery was slated for construction at Yanbu Industrial City, on the Red Sea coast of Saudi Arabia.

Yanbu accounts for just under a quarter of Saudi plans to add around 1.7 million barrels per day of refining capacity.

At least one Chinese firm was among the companies the world's top oil exporter has approached for a role in building the refinery.

Aramco was pleased with the savings made on the project after it and Conoco delayed tendering for contracts following the financial crisis and ensuing economic contraction.

As global demand for fuel fell, so did investor appetite for new energy projects, leading to a fall in costs for building new facilities.

Aramco has seen the bill reduced by billions of dollars at the megaprojects it is planning to boost energy capacity.

The cost estimate for Yanbu rose as high as $12bn in 2008, double the initial estimate for the plant of $6bn. Since then, the price was likely to have fallen to around $10bn, industry sources have said.