Saudi Aramco and Shell to release Kidan feed tenders in mid-2013

07 January 2013

Joint venture to develop gasfield near UAE border in scheme that could cost up to $4bn

The South Rub al-Khali Company Limited (SRAK) is expected to release tenders for the front-end engineering and design (feed) of the Kidan gas field development in the Empty Quarter of Saudi Arabia in the middle of 2013.

SRAK, a joint venture of Saudi Aramco and the UK-Dutch Shell Group, has been carrying out gas exploration activities across about 210,000 square kilometres of the Empty Quarter. This equates to an area the same size as the UK.

Exploration wells are still being drilled, but now SRAK is expected to start first-phase development of the Kidan field with a project that could be worth up to $4bn.

“The feed for Kidan should be ready to go to tender by the summer, but there are some difficult decisions still to be made regarding the exact scope and because of this no one is quite sure of how big this scheme is going to be,” says an oil and gas executive working in Saudi Arabia. “One thing is for sure … Riyadh wants this project up and running as soon as possible because they need the gas.”

The initial first phase will see gas production of about 300 million cf/d. However, the nameplate capacity for the majority of the infrastructure constructed to process the gas will be closer to 500 million cf/d.

The scope for the gas processing will include units to handle condensate stabilisation, gas sweetening, dehydration, dew point and sales gas compression. It is likely that a feed tender will be released that will execute all of these units in one package.

Due to the remote location of the field, an expansive pipeline network will also have to be constructed to transport the gas to the rest of the kingdom.

The gas from the Kidan field has a hydrogen sulphide (H2S) content of about 35 per cent, which means that a large sulphur treatment plant will need to be constructed alongside a gas processing plant. This is expected to have a separate feed contract to the gas processing.

“Both processing and transporting the sulphur away from the field after it has been treated has always been a major issue,” says the source. “But this is now expected to be solved by the construction of a rail link, which means it can be transferred by rail to the UAE.”

The UAE’s Etihad Rail is currently constructing the first phase of its national railway network, which will link Abu Dhabi’s gasfields in Shah and Habshan to the Port of Ruwais to transport granulated sulphur. Sources indicate there has been no deal agreed on this aspect of the scheme, but talks are taking place about an arrangement that would allow the sulphur offtake from Kidan to be transported by this route.

The feed tenders will be released as an open tender after a prequalification process and will not be tendered under Saudi Aramco’s general engineering services plus (GES-plus) contract. However, most GES-plus members are expected to participate in the scheme.

The prospective bidders for the work will include:

  • Fluor (US)
  • Foster Wheeler (US)
  • Jacobs Engineering (US)
  • KBR (US)
  • SNC Lavalin (Canada)
  • WorleyParsons (Australia)

You might also like...

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications