McDermott Adds to List of Offshore Contracts with Saudi Aramco

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Aramco (Riyadh, Saudi Arabia) recently awarded another major offshore contract to McDermott International Incorporated (NYSE:MDR) (Houston, Texas), an engineering, procurement and construction (EPC) company focused on offshore oil and gas projects. This is the third fast-track project in the past 18 months that Aramco has handed to McDermott. Industrial Info is tracking $2.28 billion in active offshore projects in the Middle East involving McDermott, most of which are in conjunction with Aramco.

McDermott already is performing engineering, procurement, construction and installation (EPCI) services for nine jackets offshore Saudi Arabia; the new contract covers four jackets and three gas-observation platforms. (In the Oil & Gas Industry, "jacket" refers to the steel framework that supports the deck and topsides on an offshore platform.) McDermott has an established record of successful installations in this field, having completed 12 jackets last year that had been contracted with Aramco in 2015, according to a press release following the agreement.

McDermott said that work on the new contract is expected to be executed through the fourth quarter of this year.

In the Manifa oil field, which hugs Saudi Arabia's northeast coast, McDermott is at work on $800 million in crude-oil and natural gas production platforms, as part of a redevelopment effort that is one of its highest-valued projects with Aramco. McDermott and other firms involved are installing 13 new platforms and modifying 26 existing platforms to drill and process 900,000 barrels per day (BBL/d) of heavy crude, 3.4 million standard cubic feet per day of associated gas and 50,000 BBL/d of condensates. For more information, see Industrial Info's project report.

In the Safaniya field, which is slightly to the north of Manifa, Industrial Info is tracking 11 projects worth roughly $306 million, the largest of which is $50 million in platform upgrades and installations. Installations include a tie-in platform with a 3,200-tonne topside and six-pile jacket, other jackets, bridges, observation platforms, pipelines and subsea cables. For more details, including specifications, schedules and contact information, see Industrial Info's project report.

East of Safaniya, the Marjan field hosts $275 million in cable replacements and platform revamps. The largest components are two $125 million umbilical installations and submarine fibre-optic cable replacements for a pair of gas and oil separation (GOSP) platforms, which are set to begin construction early this year and to be completed in early 2018. McDermott is currently at work on the renovation and life extension of the same two platforms, valued at $10 million and $15 million, which includes the removal and salvaging of existing gas turbine generators. For more information, see Industrial Info's project reports on the umbilical and cable work on GOSP-2 and GOSP-3, and the renovations and extensions for GOSP-2 and GOSP-3.

"As the third fast-track jacket contract from Saudi Aramco in the last 18 months, this award is a testament to McDermott's successful performance on previous fast-track projects for Saudi Aramco," said Linh Austin, McDermott's Vice President for the Middle East & Caspian region, in the press release. "McDermott's fully-integrated EPCI solution provides Saudi Aramco schedule certainty, one of their key drivers, while helping them meet their aggressive schedule."

Industrial Info also is tracking more $414 million in offshore projects involving McDermott in Qatar, which were signed with state-owned Qatar Petroleum (Doha, Qatar).

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