Aramco lets $1,137 million Qatif contracts

22 February 2002

Saudi Aramcoawarded in mid February four engineering, procurement and construction (EPC) contracts, worth a total of $1,137 million, to develop its Qatif incremental oil and associated gas project. The four successful companies are Italy's Snamprogetti, Paris-based Technip, the US' CBI Arabiaand the Netherlands' Suedrohrbau. The work will involve the construction of gas/oil separation plants (GOSPs) with a capacity of 800,000 barrels a day (b/d), the expansion of gas-handling capacity at existing facilities, and pipeline installation (MEED 15:2:02).

Snamprogetti has been selected for the largest package involving the construction of two GOSPs at Qatif North and Abu Safah. The company's price of $630 million was about 6 per cent lower than that of its closest competitor for the contract, Japan's JGC Corporation. The other bidder was Chiyoda Corporation, also of Japan. Snamprogetti in 2001 won two other Aramco contracts - for the $140 million Haradh Arabian Light crude increment project, involving the construction of a 300,000-b/d GOSP, and the $110 million Khuff fractionation project at Ras Tanura refinery.

The Qatif South contract, awarded to CBI, calls for the construction of one GOSP with a capacity of 300,000 b/d. The $105 million contract was awarded against competition from Argentina's Techint, JGC, Technip and Chiyoda. The contract marks the entry of CBI into the EPC market in the kingdom. Although it has been active in Saudi Arabia since 1939, the company has traditionally focused on the construction of storage facilities. CBI Arabia is the local affiliate of the US' Chicago Bridge & Iron Company.

The third contract, involving the expansion of gas-handling facilities at Berri, was awarded to Technip for $350 million. The work will focus on upgrading sulphur recovery capacity. JGC, Chiyoda, Techint and Canada's SNC Lavalinalso bid for the project. Technip in 2001 won an Aramco contract to install a compression unit at Abqaiq gas plant for $80 million.

The pipeline package was awarded to Suedrohrbau for $53 million. Techint, Turkey's Tekfenand Italy's Saipemcompeted for the contract. Suedrohrbau is already working on the gas-gathering package for Aramco's Haradh gas project.

The Qatif project represents a shift in emphasis at Aramco towards oil production capacity expansion. The company's largest projects of recent years have focused on developing the kingdom's non-associated gas reserves at Haradh and Hawiyah.

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