Bahrain awards FEED for refinery expansion

Bahrain Petroleum Co. (BAPCO) has let a contract to a subsidiary of Technip SA to develop front-end engineering design (FEED) for four main work packages as part of a planned expansion and upgrade of the 267,000-b/d refinery at Sitra, on Bahrain’s eastern coast.

Under the contract, awarded on a reimbursable basis, Technip Italy SPA will deliver FEED on units designed to process “bottom-of-the-barrel” components into high-value petroleum products, as well as all associated offsites and utilities necessary to integrate the proposed units with existing installations at the refinery, Technip said in a Sept. 16 release.

A major modernization, the project aims to enhance the refinery’s configuration and profitability by increasing its crude processing capacity to 360,000 b/d and improving its yield of products, according to Technip.

Technip said it will execute the contract through a coordinated effort of its operating centers in Rome and Abu Dhabi.

The FEED is scheduled to be completed at the end of 2015, the company said.

While Technip did not disclose a precise value of the FEED, a notice from the government of Bahrain said the contract was awarded in June at about $56 million.

In its 2012 annual report, Bahrain’s National Oil & Gas Authority (NOGA) said the refinery modernization program—which will take close to 6 years to complete in a series of phases—is one of the main structural projects of government’s plan to develop the country’s oil and gas sector and generate increased financial returns for the national economy.

A preliminary assessment carried out on the program indicated that the optimal formula for improving the refinery’s gross margin involved a combination of three major elements, which include boosting refining capacity, concentrating on production of middle distillates, and reducing or eliminating fuel oil by adding residual conversion units, according to a 2014 presentation from BAPCO.

The modernization will include the staged implementation of at least five units, including a residue hydrocracker, vacuum gas oil hydrocracker, diesel hydrotreater, sulfur recovery unit, and delayed coker, BAPCO said.

BAPCO already has selected a technology licensor for the first stage of new processing units planned for the modernization.

In June, the state-owned company let a contract to Chevron Lummus Global, a joint venture between CB & I and Chevron Corp., to prepare an engineering design package for a residue hydrocracking unit at the refinery, according to a public notice from Bahrain’s government. That contract was awarded at just over $82.8 million, according to the notice.