UPDATE 1-Conoco, Aramco delay Yanbu refinery construction
Thu Nov 6, 2008 12:53pm EST

 
HOUSTON, Nov 6 (Reuters) – ConocoPhillips and Saudi Aramco said on Thursday they halted bidding on the construction of the 400,000 barrel per day joint-venture Yanbu refinery in Saudi Arabia, citing uncertainties in the financial and contracting markets.The current bidding process to build the export refinery will be delayed to the second quarter of 2009 from the fourth quarter of 2008, the companies said in a press release.
“ConocoPhillips remains committed to working with Saudi Aramco to complete the Yanbu Export Refinery Project,” said Jim Mulva, chairman and chief executive of ConocoPhillips.
“We believe that this short delay will allow the markets to adjust from the current uncertainties and provide a stronger basis for the long-term success of the refinery.”
Conoco and Saudi Aramco said they will continue engineering and start-up plans for the project to ensure continuity while accommodating the delay.
Turmoil in world credit markets and tumbling crude oil prices have prompted some energy companies to halt more expensive projects or cut back on spending to preserve liquidity.
Yanbu, which had a price tag of $6 billion when it was announced in 2006, was one of four plants planned by the world’s top oil exporter to boost its refining capacity.But equipment and labor shortages have pushed costs up globally in the energy sector, casting doubt on whether the projects would go through as planned. (Additional reporting by Janet McGurty in New York; Editing by David Gregorio and Andre Grenon)