Aramco selects contractors for $10bn gas project

05 September 2023
The second expansion phase of Saudi Aramco’s Jafurah unconventional gas development project consists of five main EPC packages

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Saudi Aramco has selected contractors for the five main engineering, procurement and construction (EPC) packages of the estimated $10bn second expansion phase of its Jafurah unconventional gas production project.

Sources close to the project have told MEED that Aramco has issued letters of intent to the contractors.

The main EPC packages, their estimated values and the selected contractors are:

  • Package 1 – gas processing plant and main process units – $2.9bn: Larsen & Toubro Energy Hydrocarbon (India)
  • Package 2 – utilities and offsites – $2.4bn: Hyundai Engineering (South Korea)
  • Package 3 – gas compression units – $1bn: Larsen & Toubro Energy Hydrocarbon
  • Riyas natural gas liquids (NGL) package 1 – NGL fractionation trains – $1bn: Tecnicas Reunidas (Spain)
  • Riyas NGL package 2 – utilities, storage and export facilities – $2.2bn: Tecnicas Reunidas

Aramco did not respond to MEED’s request for comment on the information.

Located in Saudi Arabia’s Eastern Province, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. This shale play covers an area measuring 17,000 square kilometres.

Aramco awarded $10bn-worth of subsurface and EPC contracts in November 2021, marking the start of the development of the Jafurah unconventional gas field, said to be the largest non-associated gas resource base in Saudi Arabia.

As part of the next development phase, Aramco plans to build a facility with the potential to process up to 2 billion cubic feet a day (cf/d) of raw gas produced from the Jafurah field.

The Jafurah second expansion phase will also include EPC of large gas compression facilities, and key units for NGL fractionation.

Detailed scope of work

Package 1 – gas processing plant and main process units:

  • Three gas treatment trains, with a capacity of 700 million cf/d each, including
    • Gas inlet separation/booster compressor
    • Acid gas removal units
    • Hydrocarbon condensate stabilsation
    • Mercury removal
    • Dehydration units
    • NGL recovery
    • Sales gas compression units
  • Equipment and pipe rack foundations, access roads, and additional buildings such as process interface buildings, operation, maintenance and engineering buildings
  • Static, rotating and packaged equipment
  • Process and utilities above ground piping within the gas processing facilities
  • Underground piping network for fire water, sanitary water, oily water systems
  • Electrical work, including new gas-insulated substation, main substations, unit substations and their associated equipment and electrical material
  • Instrumentation work, including expanding existing process automation systems, expanding existing PIBs
  • Steel structure work for main and unit pipe racks, in addition to equipment structures

Package 2 – utilities and offsites:

  • Two sulphur recovery units, with a capacity of 630 tonnes a day, including tail gas treatment units
  • Air separation unit to support the five sulphur recovery trains, with oxygen enrichment operating scenario. The unit will also provide nitrogen
  • Installation of new cooling tower, with associated headers
  • Expansion of existing flare system
  • Building and installation of second-phase gas-insulated substations, with their associated electrical equipment
  • Expansion and installation of interconnecting pipe racks and piping

Package 3 – gas compression units:

  • Gas compression plants
  • Associated utilities and infrastructure
  • Reverse osmosis systems
  • Electrical systems
  • Instrumentation and process automated system
  • Construction of associated facilities

Riyas NGL package 1 – NGL fractionation trains:

Engineering, procurement, construction, pre-commissioning and commissioning of two NGL fractionation trains, with a capacity of 255,000 barrels a day each, including:

  • De-ethaniser system
  • De-propaniser system
  • De-butaniser system
  • Propane merox
  • Butane merox
  • Caustic regeneration
  • Propane dehydration
  • Butane dehydration
  • Reid vapour pressure system
  • De-coloriser systems
  • Spent caustic treatment unit, including thermal oxidisation

Riyas NGL package 2 – Utilities, storage and export facilities:

  • Propane system
  • Nitrogen system
  • Plant air and instrument air system
  • Plant control and automation, MAC coordination and central control room
  • Electrical work, including new gas-insulated substation, main substations, unit substations and their associated equipment and electrical material
  • Product storage and export
  • Flare system and related facilities
Jafurah unconventional gas base

The Jafurah project is a key component of Aramco’s long-term gas production strategy. The company expects the overall lifecycle investment at Jafurah to exceed $100bn.

In February 2020, Aramco received a capital expenditure grant of $110bn from the Saudi government for the long-term phased development of the Jafurah unconventional gas resource base.

Production of natural gas at Jafurah is expected to ramp up from 200 million cf/d in 2025 to reach a sustainable gas rate of 2 billion cf/d of sales gas by 2030, with 418 million cf/d of ethane and around 630,000 barrels a day (b/d) of gaseous liquids and condensates – the essential feedstock for the kingdom’s petrochemical industry.

Gas production from Jafurah will make Saudi Arabia the world’s third-largest natural gas producer by the end of this decade.

Aramco previously announced that capital expenditure at the Jafurah reserve is expected to reach $68bn over the first 10 years of development.

In October 2021, Saudi Energy Minister Prince Abdulaziz bin Salman said the kingdom would utilise gas produced from the Jafurah onshore unconventional gas basin to process blue hydrogen.

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Aramco has declared its ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly owned and operated assets by 2050.

Jafurah is expected to contribute to Saudi Arabia’s goal of producing half of its electricity from gas and half from renewables as the kingdom pursues its 2060 net-zero target.

At peak production, Aramco’s unconventional gas programme is expected to replace around 500,000 b/d of crude oil that would otherwise have been used for domestic consumption. The Jafurah gas development alone is expected to replace more than 300,000 b/d at peak production.

This will allow for the reliable delivery of gas and condensates through a dedicated surface network that includes a gas processing plant, a gas compression system and a network of around 1,500km of main transfer pipelines, flow lines and gas gathering pipelines.

The programme also includes the construction of the Jafurah bulk supply point, transmission lines, power interconnection for the Jafurah gas plant and new cogeneration plant facilities.

In line with Aramco’s digital transformation programme, the development of Jafurah will incorporate advanced Fourth Industrial Revolution (4IR) technologies, including industrial internet of things (IIoT) and video analytics, to enhance construction, operation and safety.

Through its unconventional gas programme at the Jafurah, North Arabia and South Ghawar fields, Aramco expects to create more than 200,000 direct and indirect jobs.

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