Saudi Focus

Officials at the Saudi Aramco signing ceremony ... $18 billion worth of EPC contracts were awarded.

Officials at the Saudi Aramco signing ceremony ... $18 billion worth of EPC contracts were awarded.

Saudi Aramco awards $18bn EPC deals

August 2019

State oil giant Saudi Aramco has awarded 34 contracts worth a total of $18 billion for the engineering, procurement and construction (EPC) of the Marjan and Berri increment programmes.

The company plans to boost the production capacity of the two oilfields by 550,000 barrels per day (bpd) of crude oil and 2.5 billion standard standard cu ft of gas per day.

More than 90 companies and institutions were invited to bid on the packages, and 16 Saudi and international companies were chosen in the fields of engineering, supply and construction. Of the 34 awarded contracts, around 50 per cent went to high-calibre Saudi firms that have proven their ability to handle complex projects.

According to Saudi Aramco, contractors working on these projects are required to maximise the procurement of material and equipment from local suppliers and manufacturers to help achieve the group’s In-Kingdom Total Value Add Program (IKTVA) goals, which aim to increase the company’s locally-sourced goods and services to 70 per cent by 2021.

The Marjan increment programme includes a new offshore gas oil separation plant, and 24 offshore oil, gas and water injection platforms. The company also plans to expand its Tanajib onshore oil facilities and construct a new gas plant, to include gas treatment and processing, NGL recovery and fractionation, and gas compression facilities. A cogeneration facility will be developed, in addition to a water desalination facility and new transfer pipelines.

 Through the Berri increment programme, the company plans to build a new gas oil separation plant in Abu Ali Island to process 500,000 bpd of Arabian Light crude oil, and additional gas processing facilities at the Khursaniyah gas plant to process 40,000 barrels of associated hydrocarbon condensate. The programme includes a new water injection facility, two drilling islands, 11 oil and water offshore platforms and nine onshore oil production and water supply drill sites.

Among the largest contracts, Italian construction major Saipem secured two projects worth over $3.5 billion, encompassing engineering, procurement, construction and installation (EPCI) services, for the development of the land facilities of the Berri and Marjan gas fields.

The first contract, “PKG-01 Expand Abu Ali Crude & KGP Gas Facilities” for the Berri field, involves the expansion, through the installation of new process units, of the Abu Ali oil-gas separation plant, about 50 km north of the Ras Tanura refinery, and of the gas treatment plant of Khursaniyah.

The second contract, “Gas Treatment and Sulphur Recovery” related to the Marjan field, involves construction of a gas treatment unit and of another unit for the recovery of acid gases for sulphur production.

Meanwhile, Hyundai Engineering & Construction (E&C) has secured a $2.7 billion order to build gas and crude oil-processing facilities for the development of two major packages of an Marjan incremental development project, reported The Korea Times. This covers Package 6 which requires it to expand an existing gas-oil separation facility and Package 12, under which Hyundai E&C will build facilities for an onshore plant. The company expects each construction project to take 41 months.

Among other deals, McDermott International has been awarded a contract in excess of $1.5 billion for Package 4 of Marjan Increment Development Project to provide EPCI of offshore gas facilities and pipelines.

The contract includes the fabrication of three tie-in platforms and seven wellhead platforms with a total weight of more than 55,700 tonnes. The scope also includes the installation of subsea trunk lines and in-field pipelines in excess of 540 km, and the laying of more than 90 km of subsea cables.  The engineering phase is scheduled to begin in the third quarter of 2019 and fabrication is scheduled to begin in the first quarter of 2020, with overall completion planned for the fourth quarter of 2022.

Also, India’s top engineering and construction firm Larsen & Toubro (L&T) said one of its key subsidiaries, L&T Hydrocarbon Engineering Limited (LTHE), has won a contract worth nearly Rs70 billion ($1.01 billion) for the Marjan project.

The Saudi group had awarded the project to the consortium comprising LTHE and Singapore-based global offshore contractor Emas AMC (A Subsea7 Company).

The scope of work includes construction of oil facilities for the Marjan Incremental Development Project besides four tie-in platforms, one tie platform module, nine production deck modules (wellhead decks) besides laying of 217 km of subsea pipelines across 25 segments, and 145 km of subsea cables across 16 segments, said the statement from L&T.

It also includes the replacement of existing control gears at eight existing offshore platforms and tie-in to existing systems.  

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