Saudi Aramco awards Saipem $400m Shedgum Yanbu pipeline

08 May 2014

Italian contractor signs deal worth about $400m despite originally being third lowest bidder for the scheme

Saudi Aramco has awarded Italy’s Saipem the contract to build the Shedgum to Yanbu natural gas liquid (NGL) pipeline expansion project in Saudi Arabia.

The contract is for the full engineering, procurement and construction (EPC) of loops four and five which will link Shedgum to Yanbu and provide vital gas feedstock to the kingdom’s second largest industrial city.

The scope of works includes detailed design, engineering, procurement, installation, commissioning and start up assistance for two pipelines, which will be completed in the second half of 2017.

MEED reported in early April that Saipem were on the verge of being awarded the contract despite being the third lowest bidder for the scheme behind the UAE/Australia’s Dutco McConnell Dowell and the Dubai-based Dodsal Group. The winning bid is in the region of $400m.

The pipeline will have a total length of 585 kilometres and a diameter of 30 inches. Aramco said in 2013 that more than 70 per cent of the materials needed for the scheme would be sourced locally from manufacturers.

Aramco is investing heavily in its master gas initiative, which is aimed at transporting natural gas around the kingdom for industrial use and power production.

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