Aramco expected to approve oil scheme

16 June 2015

Decision to be made once detailed engineering is completed

  • Decision on Khurais expansion expected by end of June
  • Aramco is producing record amounts of crude

State-owned oil company Saudi Aramco is expected to instruct Italy’s Saipem to press ahead with the $2bn contract for the main processing facilities at its $3bn Khurais expansion project once detailed engineering is completed.

MEED reported in March that Aramco was considering postponing the scheme after the detailed engineering was completed in order to cut down on capital spending until there was some recovery in the oil price.

A decision is expected within the next two weeks, but sources are indicating that the scheme will go ahead, albeit with a lower cost base.

“There has been a lot of thought [put] into this because, while Aramco is keen to lower spending, it could certainly use the extra oil [the project] will produce,” says an oil and gas source based in Saudi Arabia. “If it can trim some costs, then it will probably say yes.”

Two other pipeline packages are included in the expansion and will be constructed by two local contractors.

The packages and contractors are:

  • Mazlij-Abu Jifan pipeline – Saudi KAD Construction
  • Seawater pipeline – HAK Group

If Aramco sticks to its original plans, 300,000 barrels a day (b/d) of oil will be added to the field’s current capacity of 1.2 million b/d. Khurais is located adjacent to the Ghawar oil field, one of the world’s largest, in the Eastern Province of the kingdom. The field began operations in 2009 and produces 1.2 million b/d of light Arabian crude, 320 million cubic feet a day (cf/d) of gas and 80,000 b/d of natural gas liquids (NGLs).

The expansion at Khurais, as well as the planned increase of 250,000 b/d at the Shaybah field in the Empty Quarter, will ease production at other oil fields and will not increase the kingdom’s 12.5 million b/d capacity.

Saudi Aramco is producing record amounts of crude, more than 10 million b/d, as it attempts to maintain market share in an oversupplied global market.

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