KBR (NYSE: KBR) and AYTB announced today that they have signed a seven-year contract to provide refinery maintenance services for the Saudi Aramco Total Refining and Petrochemical Company (SATORP) at a new 400,000 bpd refinery in Jubail, Saudi Arabia. The refinery represents both a major investment by SATORP, and – as a single construction effort – a unique technical challenge due to its world-class scale and complexity. The contract value is in the approximate range between $140 million and $170 million, depending on services. Production is expected to commence in 2013.
KBR, through a joint venture with Jubail-based AYTB, will deliver full-service maintenance services at the SATORP refinery. Deliverables under the contract include overall site management and field supervision of a craft workforce covering all mechanical, electrical and instrumentation disciplines. KBR and AYTB will also provide detailed planning and scheduling services, execution of preventive and predictive maintenance programs, management of subcontractor activities and procurement of tools and equipment. Additional services include the development, in partnership with SATORP, of reliability and cost optimization programs.
“This is a milestone project for KBR as it represents a major step forward for our Services Business Group, taking on its first long-term maintenance contract in Saudi Arabia and significantly expanding its international footprint,” said Ivor Harrington, Group President, KBR Services. “For decades, KBR has provided a full suite of maintenance services to clients in the U.S. domestic market and in select overseas markets. We are proud to be establishing a long-term presence in and commitment to the Middle East.”
This is the first time a major participant in the Saudi Arabian hydrocarbons industry has outsourced a full-service maintenance contract. Under terms of the contract, the joint venture between KBR and AYTB will work in partnership with SATORP to demonstrate a model for delivering services.
“This GMS contract could redefine how plant maintenance will be performed in the future. The hydrocarbon processing industry in Saudi Arabia and the region will closely observe the results of such atypical maintenance outsourcing strategy,” said Abdulmohsen Al-Ogaili, AYTB CEO. “The partners are committed to realizing the intended long-term benefits of this contract and demonstrate a model for delivering services which has not previously been tested in the Kingdom.”