Saudi Aramco Lubricating Oil Refining Co (Luberef) has awarded US Jacobs Engineering a contract to design the expansion of its Yanbu refinery, the company said.

Luberef, established in 1976, produces around 550,000 tonnes per year (tpy) of oil lubricants at two refineries on the kingdom's Red Sea coast at Jeddah and Yanbu.   

Jacobs would conduct the front-end engineering and design (FEED) for the project, Luberef said.   

Japan's JGC Corp, Italy's Saipem and Foster Wheeler had been among the firms due to submit bids for the FEED work.   

The project, due to go online in 2015, would double the capacity of the Yanbu refinery which has a current capacity of 280,000 tpy of oil lubricants, Luberef said in a statement.   

After the expansion, the refinery would produce base oil of type two and three to meet the growing demand in the domestic and international markets, Luberef said without giving a value for the engineering deal or the project.   

A Luberef executive told Reuters last year the project would cost around $1 billion. The expansion includes a new lube hydrocracker, raising the capacity of the vacuum distillation unit (VDU), upgrading the electrical facilities and adding new storage tanks, a source said last year.

US firm ExxonMobil sold Saudi Arabia's Jadwa Industrial Investment its 30 percent stake in Luberef in 2007. Aramco holds the remainder. - Reuters