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Saudi Aramco Signed Contracts for 2 Mega Projects

Source: 3/16/2005, Location: Middle East

Saudi Aramco moved forward today on two new mega projects as it signed landmark contracts with some of the world's leading engineering and construction firms for the Khursaniyah Oil and Gas Program and the Hawiyah Natural Gas Liquids (NGL) Recovery Program.

Saudi Aramco president and chief executive officer Abdallah S. Jum'ah congratulated the winning firms and the project teams, and emphasized that these contracts will help Saudi Aramco deliver on its promise to continue securing energy for the nation and for the world. "The oil facilities will reinforce the company's international role in responding reliably to future oil market demand, while the gas program demonstrates Saudi Aramco's commitment to continue playing its part in the Kingdom's efforts to further grow and diversify the economy," Jum'ah said.

The Khursaniyah Program will develop oil and gas production facilities for the onshore Abu Hadriya, Fadhili and Khursaniyah oil fields near Jubail Industrial City in the Eastern Province, with capacity reaching 500,000 barrels of crude oil daily by the end of 2007. The Hawiyah NGL Recovery Program will produce an additional 310,000 barrels of ethane and NGL products daily through the Hawiyah NGL Plant near the Ghawar Field and an expansion of the Ju'aymah Gas Fractionation Plant not far from Ras Tanura, expected to be completed in early 2008.

Italy's Snamprogetti was selected for the execution of the Khursaniyah Producing Facilities. The scope of work includes building a central gas-oil separation plant (GOSP) and wet crude handling facilities to process crude from the three fields, gas gathering compression facilities, a cogeneration plant, crude stabilization and water injection.

A consortium of Bechtel Overseas of London and Technip of Rome was selected for the Khursaniyah Gas Plant. The scope of work covers construction of two trains of gas conditioning and ethane and NGL recovery with a total capacity of 1.0 billion standard cubic feet per day (scf/d). The facilities will produce 550 million scf/d of sales gas and 240,000 b/d of ethane & NGL and 1,800 metric tons (mt) of sulfur.

Saudi Aramco also awarded five contracts to build the world's largest NGL processing plant at Hawiyah to recover ethane and NGL from approximately 4 billion scf/d of sales gas.

Japan's JGC Corp. was awarded the contract for the Hawiyah NGL and related facilities, consisting of three (3) NGL recovery trains, product surge and shipping facilities, utilities, tank and process control system. Snamprogetti will carry out the work related to gas treating and compression facilities to include inlet distribution, two (2) gas treating trains, sales gas compression, and electrical system and support facilities. Contracts for communication, plant infrastructure facilities and temporary camp and catering services were signed with local contractors: General Telecom & Engineering (GTE), Modern Arab Construction (MAC) and National Engineering Services and Marketing Agency (NESMA).

Under a separate contract, Spain's Tecnicas Reunidas will expand the Ju'aymah Gas Fractionation Plant as part of the Hawiyah NGL Recovery Program. The contract calls for construction of a fourth train to fractionate 270,000 b/d of ethane and NGL and 100,000 b/d of propane and NGL.

These contracts have placed particular emphasis on maximizing Saudi participation in the engineering and construction phases of the program. Saudi employment requirements have been included as part of the project requirements, in addition to using Kingdom-based engineering firms in the design phase.

Saudi Aramco has been honing its relationships with engineering and construction firms around the world, and the contracts reflect the growing sophistication of those partnerships. Over the years, Saudi Aramco has demonstrated an unwavering commitment to establishing meaningful relationships with international contractors, manufacturers and suppliers.

"The stage is now set for a new and lucrative business relationship between Saudi Aramco and contractors," said Saad F. Al-Dosari, Saudi Aramco's acting executive director of Project Management.

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