Frontrunners emerge for Fadhili gas plant

01 September 2015

European and South Korean companies compete for year’s largest Saudi oil and gas project

  • Tecnicas Reunidas submit low bids for packages 1 and 2, say sources
  • Two groups in running to win package 3 sulphur recovery unit
  • Site preparation works expected to be awarded soon

Frontrunners have emerged for several engineering, procurement and construction (EPC) packages on Saudi Aramco’s Fadhili gas plant, after bids were submitted in late July.

Spain’s Tecnicas Reunidas (TR) submitted the lowest prices for packages 1 and 2, according to sources familiar with the project.

The lowest bid for package 1, which covers the central gas processing facility, came in at less than $2bn while the proposal for package 2 – the offsites and utilities – was less than $1bn, sources told MEED.

TR was initially prequalified to bid in a consortium with South Korea’s GS Engineering & Construction, but the two companies split before the bid and TR submitted independent proposals for the packages.

For package 3, the sulphur recovery unit (SRU), the two lowest bidders were UK-based Petrofac and a consortium of South Korean groups Daewoo Engineering & Construction and Samsung Engineering. The lowest bids for package 3, which received the most proposals, came in at between $1.35bn and $1.7bn.

Other bidders for one or more packages included South Korean groups Daelim Industrial and Hyundai Engineering & Construction, and a consortium of Japan’s JGC Corporation and Italy-based Saipem.

The scheme is the largest oil and gas project in Saudi Arabia likely to be awarded to EPC contractors in 2015, amid a period of subdued activity in the kingdom’s hydrocarbons sector.

The Fadhili plant will process sour gas from the Khursaniyah oil field and the Hasbah non-associated gas field. Aramco has ramped up its offshore non-associated gas operations in the Gulf in recent years and is developing several fields in the region. These include the Karan, Hasbah and Arabiyah fields.

Much of the gas contained in the oil major’s Eastern Province hydrocarbon assets is sour, meaning it has a high sulphur content. This makes it more difficult to process than sweeter gas, which has minimal amounts of sulphur.

The project, along with other gas projects at Wasit and Midyan, will go towards meeting rapidly-growing domestic gas demand in the kingdom. Aramco is also pursuing production from shale gas assets in the north.

The budget for the Fadhili plant has been expanded to about $6.5bn, according to industry sources, up from initial estimates of $5bn.

UK-based Amec Foster Wheeler carried out the front-end engineering & design (feed) study for the project, which is expected to have the capacity to process 2.5 billion cubic feet a day (cf/d).

The plant will be built 30 kilometres southwest of the existing Khursaniyah gas plant.

State-owned Aramco also tendered an EPC contract for the site preparation works for the project. The frontrunners for this contract are local groups Al-Muhaidib Group and Azmeel Contracting, according to sources, with the deal expected to be worth $100m.

The site preparation works is expected to be the first EPC contract awarded on the project in the coming weeks.

Aramco is also thought to have floated an EPC tender to build a pipeline as part of the scheme.

The contract model will be on a lump-sum turn-key (LSTK) basis, with a percentage of the engineering work and project management to be carried out overseas.


A previous version of this article stated that package 2 was for the sulphur recovery unit (SRU) and package 3 was for the offsites and utilities (O&U). The article has been corrected to show that package 2 is for the O&U and package 3 is for the SRU.

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