Foreign and Local Companies Awarded $5 Billion Saudi Aramco Mega Oil and Gas Project Contracts

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Saudi Aramco (Riyadh) announced March 16, 2005, the awarding of contracts worth a total $4-$5 billion for two mega projects - the Khursaniyah Oil and Gas Program and the Hawiyah Natural Gas Liquids (NGL) Recovery Program.

In the Khursaniyah project, oil and gas production facilities will be developed for the onshore Abu Hadriya, Fadhili, and Khursaniyah oil fields near Jubail Industrial City. By the end of 2007, capacity should reach 500,000 barrels of crude oil per day. Snamprogetti (NYSE:E) (Rome, Italy) won the contract for the execution of the project's producing facilities. Included in the scope of work are the central gas-oil separation (GOSP) plant and the wet crude handling facilities to process crude from the three fields. Gas compression facilities, a cogeneration power plant, crude stabilization, and water injection, are also included in the scope.

The Khursaniyah gas plant contract went to Bechtel Overseas London (San Francisco, California) and Technip (NYSE:TKP) (Paris, France). The scope of work covers construction of two trains of gas conditioning and ethane NGL recovery, with a total capacity of one billion standard cubic feet per day (scf/d). The complex will produce 550 million scf/d of sales gas and 240,000 b/d of ethane and NGL, and 1,800 tons of sulfur.

Saudi Aramco did not give the value of the contracts, but industry sources said the total project could be worth up to $3 billion.

The main contract for the Hawiyah NGL project and related facilities was awarded to the JGC Corp (Tokyo:1963) (Tokyo, Japan) and covers three NGL recovery trains, product surge and shipping facilities, utilities, tank and process control systems. The project will produce 310,000 barrels of ethane and NGL products per day from about four billion scf/d of sales gas.

Snamprogetti will handle work related to gas treating and compression facilities, to include inlet distribution, two gas treating trains, sales gas compression, and electrical system and support facilities on what is claimed to be the world's largest NGL facility.

Local Saudi contractors will carry out contracts for communication, plant infrastructure, and temporary camp and catering services. The companies are General Telecom & Engineering (GTE), Modern Arab Construction (MAC) and National Engineering Services and Marketing Agency (NESMA). Emphasis was placed on maximizing Saudi participation in the engineering construction phases of the project.

As a part of the Hawiyah NGL Recovery Program the Ju'aymah Gas Fractionation plant will be expanded. Tecnicas Reunidas (Madrid, Spain) will carry out the contract covering the construction of a fourth train to fractionate 270,000 bpd of ethane and NGL and 100,000 bpd of propane and NGL. Completion of the project is expected in early 2008.

Industry sources have put the total value of the Hawiyah project at about $2 billion. The value of contracts has not been specified by Saudi Aramco.

Abdullah Jum'ah, Saudi Aramco's president and chief executive officer, said that the oil facilities in the program would reinforce the company's international role in responding reliably to future oil market demand and that the gas program demonstrated the company's commitment to continue playing its part in Saudi Arabia's efforts to further boost and diversify the economy.

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