Saudi Aramco awards Saipem $300m pipeline deal

26 August 2012

Italian contractor wins specialist pipeline deal for $4.6bn Wasit gas development

Saudi Aramco has awarded Italy’s Saipem the $300m engineering, procurement and construction (EPC) contract to build a portion of pipeline at the Arabiyah and Hasbah non-associated gas fields in Saudi Arabia.

The pipeline project is part of the $4.6bn Wasit gas development being executed off the Gulf coast and onshore in the Eastern Province of the kingdom. MEED reported in March 2011 that Saipem were awarded the offshore packages for the project.

“Saipem are the winners on this one, but most people had them as the favourites from the beginning as they are already completing the other offshore work for the Wasit project,” says a source familiar with the scheme. “Now all that is left to be decided is the length of pipeline that will be cladded.”

The scope of works includes the main trunk line that will connect the two offshore fields with the onshore facilities. Saipem will lay the main trunkline with 36-inch diameter pipes cladded with a special non-corrosive alloy known as Inconel. The initial length of Inconel-clad pipe was estimated at 10 kilometres, but now figures of 17km and 22km have been stated as possible lengths by in-kingdom sources.

MEED reported in early May that Saudi Aramco was facing delays of up to 12 months on the Wasit scheme due to the dense sulphur content of the Arabiyah and Hasbah fields. The project is also said to be over budget by an estimated $600m.

Sources now indicate that Aramco is working towards fixing the problems and that no further delays are expected on the scheme.

When completed, the Wasit project will supply 2.5 billion cubic feet a day (cf/d) of gas into the kingdom’s network. Saudi Aramco plans to provide the kingdom with 13 billion cf/d by 2020 with the gas from the Arabiyah and Hasbah fields, making up a large percentage of the additional volume. Aramco currently produces about 9.4 billion cf/d of gas and has proven reserves of 279 trillion cubic feet, the fourth largest in the world.

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