Aramco to do straddle plant alone

21 June 2002

The front-end engineering and design (FEED) tender for a large straddle plant to produce natural gas liquids (NGL) and balance the natural gas and condensates from Saudi Aramcoand gas initiative projects is to be issued in the third quarter, industry sources say. The plant was originally to have been included in the scope of core venture 1 in the gas initiative. However, Aramco now plans to build it independently, the sources say.

The scope and schedule for the plant will be decided on the basis of the ongoing gas initiative negotiations. However, Aramco is understood to need the plant soon, so it is expected to proceed with a reduced scope of work if the negotiations continue to be slow. Aside from processing gas produced in core venture 1, the plant will process gas from the new Haradh and Hawiyah gas plants. The project is likely to be worth more than $1,000 million, say contractors, and will entail the construction of additional pipelines as well as the plant.

Negotiations between the leading partners of the gas initiative core ventures and top Saudi officials, led by Crown Prince Abdullah, were expected to take place in late June. Sources close to the negotiations say that the talks were expected to clarify the positions of both sides and lay the groundwork for a resolution of some fundamental issues.

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