SATORP Achieves Substantial Cost Reduction

Following on from my previous post on the cost savings achieved by Dow and Saudi Aramco at Ras Tanura, I have now learned that Total and Saudi Aramco have reported cost savings of over 20% on the SATORP integrated refinery project. This has been achieved by slightly delaying the project and lengthening the EPC selection process in order to take advantage of lower construction costs. As noted previously, the IHS CERA downstream index showed an increase of over 40% for construction costs between 2006 and Q3 2008, reflecting the significantly increased demand for new construction in this period. Even so, to achieve a 20% reduction in cost for a project as large and as complex as SATORP and in such a short period of time is highly impressive. I'm informed that Saudi Aramco and Total will be presenting details of this project as a case study at the forthcoming Petchem Arabia meeting , which takes place in Abu Dhabi during October.