Jazan Refinery Project Questions & Answers

1	The Ministry of Petroleum and Mineral Resources (MinPet) has announced an investment opportunity for the private sector investors to build, own and operate a new export refinery, to be located in the Jazan Region.  Could you provide the background to this investment initiative?
	In compliance with the aspiration of the Custodian of the Two Holy Mosques to extend development to all regions in the Kingdom of Saudi Arabia, especially those that have not yet been industrialized, he instructed MinPet to undertake a study to build a refinery in the Jazan region.   The primary objectives of this initiative are summarized as follows: Introduce an investment opportunity in the refining industry to the private sector investors in the Kingdom; Leverage the hydrocarbon resources in the Kingdom; Promote industrial and social development in the Jazan region; Contribute to regional development in the Kingdom; Encourage job creation through the development of the project; and Incorporate “value-add” enhancements.
2	Has the project site been selected?
	Yes, the Jazan Refinery will be located in the land allocated to MinPet within the Jazan Economic City in Baish, one of the designated economic cities in the Kingdom.
3	What is the expected size of the Jazan Refinery?
	It is currently anticipated that the Jazan Refinery will have a crude distillation capacity of between 250 – 400 MBD.
4	Has the configuration of the Jazan Refinery been selected?
	No, it is up to each applicant to propose a configuration for the Jazan Refinery.   The configuration of the Jazan Refinery will reflect that contained in the proposal submitted by the Successful Applicant.
5	What type of crude oil will the Jazan Refinery process?
	This will be established through the supply volumes outlined in the long term Crude Oil Supply Agreement (COSA) to be entered into between the Successful Applicant and Saudi Aramco.
6	How will crude oil be priced for the Jazan Refinery?
	The crude oil will be supplied to the Jazan Refinery at international market pricing, to be specified in the COSA.
7	How will crude oil be supplied to the Jazan Refinery?
	Crude oil will be made available on an FOB basis at either Yanbu (for Arabian Light) or Ras Tanura (for Arabian Heavy), based on the long term COSA to be entered into between the Successful Applicant and Saudi Aramco.
8	Will the Jazan Refinery supply the local demand?
	The Jazan Refinery will be an export refinery with its entire production to be targeted for sale into the international markets. However, in cases of national emergency or shortage of refined products, MinPet may require the Jazan Refinery to supply refined products domestically, subject to compensation.
9	Could the Jazan Refinery also include petrochemical and/or power generation facilities?
	Yes, the investor may propose to include petrochemical facilities that it considers to be beneficial to the overall economics of the Jazan Refinery Project.  In addition, the investor may propose to include captive power generation facilities.
10	Will there be incentives for the Jazan Refinery Project?
	Yes, there will be a package of incentives that will be available to the Jazan Refinery Project, including the following: Favourable overall investment environment in the Kingdom, including a package of fiscal incentives. Specific considerations in respect of additional benefits specific to the Jazan Refinery Project. Provision of certain facilities and infrastructure.
11	How will the investor be selected?
	Eight (8) private sector applicants from the Kingdom (KSA Applicants) were pre-qualified through an expression of interest (EOI) process to receive a request for proposal (RFP), issued by MinPet on September 6th 2008, to build, own and operate a new export refinery to be located in the Jazan Region.  In addition a number of international oil companies (IOC(s)) are also eligible to receive the RFP.  The RFP provides the applicants with clear guidelines as to what data and information are required to be provided to MinPet in the proposals.    The proposals must be submitted by a consortium that consists of at least one (1) and no more than two (2) KSA Applicant(s) and at least one (1) and no more than two (2) IOC(s).  The deadline for submission of the proposals is March 7th, 2009.   The proposals will be reviewed and evaluated by MinPet in accordance with a set of defined criteria which are fully described in the RFP.  MinPet intends to select the Successful Applicant by end of second quarter 2009.
12	When is the Jazan Refinery expected to be completed?
	MinPet is targeting start up of the Jazan Refinery by 2015.
13	Will there be an opportunity for public participation in the Jazan Refinery Project?
	Yes, subject to market conditions and relevant regulatory approvals, a percentage of the shares will be offered to public investors through an initial public offering (IPO) on the Saudi Stock Exchange (Tadawul).
14	Is the investment opportunity only limited to Jazan or would there be other similar opportunities in other regions?
	No other similar specific opportunity for private sector investment in refinery projects has been defined at this time.  Any future such opportunities will be decided on a case by case basis, depending on a number of prevailing factors applicable at such future date.