Aramco in talks over billion-dollar boost to Shaybah field

23 November 2007

Saudi Aramco is in talks for a further $1.25bn, 250,000-barrel-a-day (b/d) expansion of its Shaybah field. If it goes ahead, the field will become one of six in the kingdom with a production capacity of at least 1 million b/d.

The 500,000-b/d field is already conducting a 250,000-b/d expansion, which is being carried out by Canada's SNC Lavalin. That will take capacity to 750,000 b/d and should be completed by the fourth quarter of 2008.

Aramco is now commissioning Saudi Consulting Services (SaudConsult) to carry out a feasibility study for the phase 3 development of the field, with SNC Lavalin in line to win the subsequent engineering, procurement and construction (EPC) work.

SaudConsult is expected to submit the results of its study by February 2008, with Aramco's board set to make a final decision on the next phase of Shaybah's expansion by the end of the first quarter.

An executive close to the project says a third phase will require the additional expansion of central processing facilities, and is likely to lead to the construction of another gas-oil separation plant on the field.

SaudConsult has been involved with the project since its initial expansion, after linking with SNC and the US' Jacobs Engineering to win the front-end engineering and design (FEED) contract in late 2005 (MEED 11:11:05).

Although the second phase of the EPC contract was priced at about $900m, soaring labour and materials costs are expected to push the third phase to $1.25bn, says the executive.

SNC has been under pressure to deliver the project on schedule after falling about a month behind this year. About one-quarter of the current expansion has been completed to date, with Aramco setting a final deadline of February 2009 for the completion of the work.

Aramco is under pressure to deliver on its promise of raising the kingdom's oil capacity from 10.8 million b/d today to 12.5 million b/d by 2009, as part of a $31bn production boost (MEED 2:11:07).

The Shaybah field, located in the Rub al-Khali (Empty Quarter), is estimated to have reserves of 14.3 billion barrels of crude oil and 25 trillion cubic feet of associated gas.

Production from the field started in 1998, after Bechtel completed work on the main processing facility. Shaybah produces highly sought-after Extra Light crude, which has a sulphur content of just 0.04 per cent and sells at a premium on the international market.

Crude from the field is transferred through a 620-kilometre pipeline to Abqaiq for blending with its Arab Light crude. About 880 million cubic feet a day of gas is reinjected into the field.

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