Petrofac handing over major Middle East oil projects

18 December 2018
Projects in Kuwait, the UAE and Saudi Arabia are due to be completed in the coming months

Petrofac is in the final stages at a number of major engineering, procurement and construction (EPC) projects in Kuwait, the UAE and Saudi Arabia, with hand overs set for the coming months.

The UK-based contractor has also been awarded a $115m contract by Petroleum Development Oman to install units to support oil production in the Sultanate.

The 36-month project covers the installation of a new gas turbine and heat-recovery steam generator at the Qarn Alam power plant in central Oman.

The latest contract award comes as Petrofac brings a series of projects to a close, including a $4bn scheme awarded in 2015 for new heavy oil processing facilities at the Ratqa field in northern Kuwait.

“In Kuwait, the Lower Fars Heavy Oil, Manifold Group Trunkline and KNPC Clean Fuels projects are in pre-commissioning or phased hand-over stages,” the company said in a 18 December statement.

Kuwait’s heavy oil production stands at 15,000 barrels a day (b/d) from the northern Umm Niqa field. Phase one of production from the Ratqa field’s Lower Fars reservoir is set to begin next year, before ramping up to 60,000 b/d.

Petrofac is also working on the construction of a 160km pipeline to transport the heavy crude storage facilities at Ahmadi. The crude has a density of 10-18 API degrees, and also contains 5 per cent sulphur, compared to 31 API decrees and 2.5 per cent sulphur for the country’s mainstay Kuwait Export Crude grade.

The heavy oil is earmarked as feedstock for the 615,000 b/d Al-Zour refinery in southern Kuwait, and is set for completion in 2020.

The Clean Fuels Project, Kuwait’s ambitious scheme to integrate, expand and modernise its major existing refineries that allows them to produce higher quality fuels, is also coming to a close. Petrofac leads a joint venture (JV) with South Korea’s Samsung Engineering and US-based CB&I, under a $3.7bn contract for the construction of new units at the Mina Abdulla and Shuaiba refineries.

Petrofac also announced that it had achieved a major milestone at the UAE’s offshore Upper Zakum field, where its new facility is ready for startup.  Known as UZ750, the project covered the building of new oil production facilities on four artificial islands in the shallow waters of the Gulf, around 80-km from Abu Dhabi. These include cluster manifolds and facilities for crude oil processing, water injection and gas lift. Crude is transported by pipeline to Zirku Island for further processing, storage and export.

The work is being carried out by Petrofac Emirates, a JV of Petrofac and Abu Dhabi's Mubadala Petroleum, which was awarded a $3.7bn contract in 2013. South Korea’s Daewoo Shipbuilding & Marine Engineering is also part of the consortium carrying out the works.

In Saudi Arabia, Petrofac is nearing completion at the Jizan North and South tank farms for state-energy giant Saudi Aramco. The tank farm will store crude and products for the new 400,000 b/d Jizan refinery on the southern Red Sea coast near the border with Yemen.

The $4bn refinery itself is due for completion in 2019, when it will supply 20 per cent of Saudi Arabia's fast-growing demand for oil products, such as gasoline and diesel.

It will take Saudi Arabia’s total domestic refining capacity to 3.3 million b/d.

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