Frontrunner emerges for Aramco pipeline project

20 September 2016

Five contractor are competing to win the deal to build 220-kilometres product pipeline with an estimated cost of $300m

Turkish contractor Tekfen is understood to have emerged as the frontrunner for an estimated $300m contract to build a product pipeline, which will connect the kingdom’s Qassim area to its northwestern region of Hail, according to people familiar with the matter.

The pipeline will run 220 kilometres to transport gasoline and diesel to the Hail, reducing the need for tankers to supply fuel via road. Five companies are thought to have been vying for the EPC deal from state-run oil and gas giant Saudi Aramco, the sources said. Bids for the project were submitted on 31 May, MEED reported earlier in the year.

This could be the second EPC award for Tekfen in quick succession. The company is understood to have already won the estimated $300m contract to construct pipelines, connecting Yanbu to North Jeddah on the kingdom’s Red Sea coast, according to the sources familiar with the matter. 

The Saudi Aramco scheme includes two pipelines that will transport oil products including gasoline, diesel and jet fuel from the refining hub of Yanbu to Jeddah, Saudi Arabia’s commercial centre and the second largest city in the kingdom.

Several companies including the UAE’s Dodsal, Egypt’s Engineering for the Petroleum & Process Industries (Enppi), India’s Larsen & Toubro, local Nesma & Partners, Italy’s Saipem, had submitted bids for the (EPC) deal in May.

Saudi Aramco, the state-controlled oil and gas giant, is also planning to build a new bulk plant at Hail with an estimated cost of $300m to store gasoline and diesel and distribute the products to the surrounding region. Several companies have been asked to submit bids for the main contract.

In January, Aramco awarded several EPC contracts worth a combined $1bn for pipelines on its Master Gas System Expansion. The contracts were secured by Al-Khobar-based Saudi KAD Construction.

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