EXCLUSIVE: Saudi offshore oil could add up to 1 million barrels

06 June 2017

Aramco planning capacity upgrades at Marjan, Berri and Zuluf fields in coming years

Planned capacity expansions at Saudi Aramco’s offshore assets could add about 1 million barrels a day (b/d) of crude capacity as the state-owned oil company shifts investment focus to its fields in the Gulf.

Aramco is at the design phases of major capacity expansions at the Marjan and Berri fields and, according to industry sources, is also planning an even larger development at the Zuluf field.

Over the past two months, Aramco has awarded key contracts on both the Marjan and Berri expansion programmes.

The UK’s Amec Foster Wheeler was recently awarded a five-year contract by Aramco to deliver the front-end engineering and design (feed), pre-feed, overall programme management and other support services for the Marjan scheme.

The project will include a 300,000-b/d gas oil separation train and a greenfield gas processing plant. Marjan is estimated to have the capacity to produce about 500,000 b/d of crude based on current installed production facilities.

The engineering, procurement and construction (EPC) tenders for the scheme are expected to be floated in the first half of 2018 and could be worth a total of up to $5bn, according to Saudi-based industry sources. MEED revealed Aramco’s plans to expand the Marjan field in February this year.

In late April, Canada’s SNC-Lavalin was awarded a deal including a feed study for the Berri Increment Programme. The work includes designing a 250,000-b/d gas oil separation plant at the existing Abu Ali gas plant and additional facilities at the Khursaniyah gas plant to process 40,000 b/d of condensate.

The facilities are proposed to “process a potential increased output of Arabian Light crude from the Berri field”, known as the Berri Crude Increment, according to SNC-Lavalin. The Berri field has an estimated crude production capacity of about 300,000 b/d.

The feed study was set to begin in April and the pre-EPC phase is expected to be completed by August 2018.

With the Marjan and Berri expansions set to add 550,000 b/d of crude production capacity, a further project on the Zuluf field could boost capacity even further.

“Aramco is planning a field development on Zuluf that is going to be even larger than Marjan. It will go ahead after the EPC deals on Marjan have been awarded,” a Saudi-based oil industry source told MEED.

Current capacity at the Zuluf field is estimated at between 750,000 b/d and 850,000 b/d. In 2008, Ali al-Naimi, Saudi oil minister at the time, revealed plans for a 900,000-b/d expansion at the Zuluf field, but it is unlikely the scope of the project will remain unchanged since these initial plans.

With the Zuluf scheme set to be bigger than Marjan, the total capacity increase at the offshore fields over the coming years could be as high as 1 million b/d – the equivalent of 8 per cent of the kingdom’s official oil production capacity of 12.5 million b/d.

Since the start of 2016, all Aramco offshore project work has been awarded as part of the Long-Term Agreement (LTA) programme, giving five contractors exclusive rights to bid on several tenders. Aramco has awarded an estimated 15 contracts as part of the LTA since the start of 2016, worth more than $5bn.

The five groups Aramco has contracted under the LTA are: US-based Dynamic Industries; a partnership of India’s Larsen & Toubro and Singapore’s Emas; US-based McDermott; UAE-based National Petroleum Construction Company (NPCC); and Italy’s Saipem.

However, MEED understands that Aramco is looking for new contractors to join the LTA due to the high volumes of work forecast to be signed off over the coming years.

Norway’s Aker Solutions, UAE-based Lamprell, London-headquartered SubSea 7 and France’s Technip are understood to be among the companies invited to enter the prequalification process.

It is not clear whether these offshore programmes will increase Saudi Arabia’s total crude capacity or merely offset declining production in other ageing assets.

However, Aramco will use these expansions to increase gas production, with all associated gas likely to be processed at onshore facilities, which will also need to be expanded to accommodate the increased production.

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