Aramco awards $25bn of gas expansion contracts
MEED | Middle East Economic Digest
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Contracts were awarded for EPC works and other services for the third expansion phase of the Master Gas System and the second expansion phase of the Jafurah unconventional gas development
Saudi Aramco has officially awarded $25bn contracts for engineering, procurement and construction (EPC) works, and other services, for two of its major gas expansion programmes.
The Saudi energy giant held a signing ceremony on 30 June at its headquarters in Dhahran to award contracts for two its major gas expansion projects – the third expansion phase of the Master Gas System (MGS-3) and the second expansion phase of the Jafurah unconventional gas development. Contracts for new gas rigs and ongoing capacity maintenance projects were also awarded during the ceremony.
MEED previously reported about Aramco inviting successful contractors and service providers of the two megaprojects for a contract signing ceremony on 30 June. The function was originally scheduled to take place?on 30 May.
Saudi Energy Minister Prince Abdulaziz bin Salman and Amin Nasser, Aramco's president and CEO, attended the gathering on 30 June.?
“These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries,” Nasser said. “The scale of our ongoing investment at Jafurah and the expansion of our Master Gas System underscores our intention to further integrate and grow our gas business to meet anticipated rising demand.”
Aramco has been set a target of increasing its gas production by 60% by 2030, with 2021 as its baseline, the company revealed in its?2023 financial results.
Master Gas System-3 EPC packages
Aramco announced awarding 15 lump-sum turnkey contracts for the MGS-3 megaproject, worth $8.8bn.
The expansion, “being conducted in collaboration with the Ministry of Energy,” will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet per day by 2028, through the installation of around 4,000km of pipelines and 17 new gas compression trains, the company said on 30 June.
Aramco has divided EPC works on the MGS-3 project into?17 packages. The first two packages involve upgrading existing gas compression systems and installing new gas compressors. The 15 other packages relate to laying gas transport pipelines across various locations in the kingdom.
Aramco selected?the following contractors for 15 of the 17? EPC packages of the estimated $10bn MGS-3 project,?MEED?reported in February:
Meanwhile, contractors?recently submitted revised commercial bids?for package 9 of the project. This package was part of the original tendering process for the project, but the award process has been delayed due to Aramco asking bidders to submit revised prices.
Separately, package 16 of the MGS-3 project, has been carved out as a separate tender by Aramco.?Contractors are?preparing bids for package 16, which are now due to be submitted by 30 June.
Jafurah second expansion phase
Aramco awarded 16 contracts, worth a combined total of around $12.4bn, for the second expansion phase of the Jafurah unconventional gas development.
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The work on the project will involve construction of gas compression facilities and associated pipelines, expansion of the Jafurah gas plant, including construction of gas processing trains, and utilities, sulphur and export facilities, Aramco said in its statement.
“It will also involve construction of the company’s new Riyas natural gas liquids (NGL) fractionation facilities in Jubail — including NGL fractionation trains, and utilities, storage and export facilities — to process NGL received from Jafurah,” the company added.
Last September,?MEED reported?that?Aramco had selected contractors for the estimated $10bn Jafurah second expansion phase project. Aramco officially issued the EPC contracts?to the winners?in late October.
The main EPC packages of the Jafurah second expansion phase project, their estimated values?and the selected contractors are:
In October,?Indian industrial services conglomerate?Larsen &?Toubro (L&T) announced?that its subsidiary Larsen &?Toubro Energy Hydrocarbon (LTEH)?had won the contract for the main gas compression system of the Jafurah second expansion phase project from Aramco.
The total value of the Indian firm's?EPC contracts with Aramco is close to $4bn, making it the contractor with the largest share of work in the Jafurah second expansion phase project.
Hyundai E&C?in April held a groundbreaking ceremony?for package 2 of the project. The scope of work on the package mainly involves EPC of utilities and offsite facilities at the Jafurah second expansion phase project.
Power Construction Corporation of China (PowerChina), meanwhile,?announced in October?that its subsidiary, Eighth Hydropower Bureau, had won a contract from Aramco to build industrial facilities to?serve the Riyas NGL project.
Following the completion of EPC works, the Riyas NGL project will?be connected to package 6 of the first phase of the Jafurah unconventional gas development via a 320km pipeline. Eighth Hydropower Bureau is also the contractor for Jafurah’s first phase package 6, for which?EPC works are progressing.
Located in Saudi Arabia’s?Eastern Province, the Jafurah basin?hosts the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. This shale play covers an area measuring 17,000 square kilometres.
Aramco on 30 June also awarded contracts for an additional 23 gas rigs, worth $2.4bn, along with two directional drilling contracts worth $612m, for the Jafurah unconventional gas development.
These contracts follow 13 well tie-in contracts at Jafurah, worth a total of $1.63bn, that Aramco said it awarded between December 2022 and May 2024.
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Defence Industrial Security Leader | Multimillion $ Project Manager| Security and Risk Management Professional
8 个月Fantastic update!