Saipem emerges as fellow frontrunner for $5bn Wasit scheme

21 February 2011

Italian contractor now competing with Hyundai Heavy Industries for offshore packages of Aramco project

Italy’s Saipem has emerged as a fellow frontrunner along with South Korea’s Hyundai Heavy Industries (HHI) for the engineering, procurement and construction (EPC) contract for the offshore packages of the $5bn-plus Wasit gas development.

Saipem was originally among the highest bidders on the scheme, but has since been asked to resubmit a lower price for the Saudi Aramco project on the Gulf coast of Saudi Arabia.

“Saipem is good technically, but their original commercial bid was too high,” says a contracting source in Saudi Arabia. “Now a lower bid has been submitted that is more in line with the offer Hyundai has made.”

The source adds that Saudi Aramco is now evaluating the bids and will make a decision by early March.

Another source told MEED in early February that HHI was the lowest bidder for the Wasit offshore packages, but also said that a lack of experience doing offshore projects in Saudi Arabia could hinder its chances (MEED 4:2:11).  

There are two separate offshore packages available for the Wasit scheme, but it is now likely that Aramco will make one award that will cover both. The bids are understood to be in the region of $2.4bn for the combined packages.    

The first offshore contract covers the construction of seven offshore wellhead production platforms at the Hasbah field, which can produce up to 1.3 billion cubic feet a day (cf/d) of gas from the field, tied in to central distribution facilities.

The second contract is for six wellhead platforms at the Arabiyah field, again tied in to central distribution facilities, capable of producing 1.2 billion cf/d of gas. It also includes six 12-inch flowlines, a 150 kilometre pipeline linking the facilities with Wasit, a 150km mono-ethylene glycol (MEG) pipeline between Arabiyah and Wasit and a 91km submarine power cable.

The contracts are part of the wider Wasit gas development programme. Under the Wasit scheme, Aramco wants to produce 2.5 billion cf/d of sulphur-rich gas from the offshore Arabiyah and Hasbah fields before transporting it to central processing facilities at Wasit.

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