Aramco set to award four offshore contracts

10 April 2016

Four brownfield projects will be awarded to Long Term Agreement companies ahead of Hasbah deal

Saudi Aramco is expected to award four major brownfield contracts on offshore oil and gas assets in the coming weeks as part of its Long-Term Agreement (LTA) programme.

According to several industry sources, the state-owned oil and gas producer will award four Contract Release Purchase Orders (CRPO) ahead of a larger deal for the expansion of the Hasbah gas field.

Four international groups are vying for the contracts after entering the LTA with Aramco in 2015. These companies are:

The CRPO contracts are understood to be worth between $150m and $700m, and cover work on existing Aramco assets in the Gulf, including the Safaniyah, Abu Safa and Kurayn fields.

Aramco is also assessing bids on a larger project to expand the production capacity of its Hasbah sour gas field. All four groups are vying for the contract, which is thought to be worth more than $1.5bn.

It is unclear which company is likely to be awarded the Hasbah contract. MEED has received several conflicting reports from sources familiar with the project following early indications of frontrunners for the deal.

The Hasbah project will expand the production capacity of the gas field by an additional 2 billion cubic feet a day (cf/d), which will be piped to the onshore Fadhili gas plant.

In late 2015, Aramco selected companies for three major contracts on Fadhili, with UK-based Petrofac confirming its contract on the scheme’s sulphur recovery plant.

“The Fadhili gas plant has a longer timeline than the Hasbah project,” said an industry source, saying that Fadhili would take about 10 months longer than Hasbah to complete. “There is a gap between the two projects Aramco can play with.”

According to two sources, Aramco has invited a fifth company to join the LTA programme. The sources corroborated a report in oil and gas newspaper Upstream that this company is UAE-based National Petroleum Construction Company (NPCC).

Aramco is understood to have doubts that the four groups currently in the LTA have the capacity between them to carry out the programme of projects being tendered.

The LTA gives the groups involved the exclusive opportunity to bid for projects supporting Aramco’s Maintain Potential Programme, gas programme and other offshore work in the Gulf.

In March, Aramco announced it has started the first production of gas from the Hasbah field.

The new facilities have a capacity of 1.3 billion cf/d and are now piping gas to the Wasit processing plant, which was built as part of the same project.

Aramco signed the main engineering, procurement and construction (EPC) contracts on the estimated $4.6bn Wasit project in 2011. The scheme also includes establishing a gas capacity of 1.2 billion cf/d at the adjacent Arabiyah field.

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