State-owned oil company Saudi Aramco has decided against awarding Athens-based Consolidated Contractors Company (CCC) two pipelines at its $3bn Khurais oilfield expansion project and is now negotiating with the two second-lowest bidders.

MEED reported in September that CCC was the lowest bidder for the scheme in the Eastern Province and a contract was expected to be signed by the end of October.

However, that is now not the case and the two second lowest bidders for each package, both local, are in direct negotiations with Aramco. The packages and contractors are:

• Mazlij-Abu Jifan pipeline - Saudi KAD Construction (Local)
• Seawater pipeline - HAK Group (Local)

“CCC was the lowest bidder and it is a surprise to many that they have not been successful,” says a source familiar with the scheme.

The reason behind the decision not to award CCC the packages is not known.

Aramco has already signed a $2bn contract with Italy’s Saipem for the engineering, procurement and construction of the main processing facilities at Khurais. The contract will be worth about $1.6bn to Saipem after novation of long-lead items.

Aramco plans to add 300,000 barrels a day (b/d) to the field’s current capacity of 1.2 million b/d. Khurais is located adjacent to the Ghawar oil field, one of the world’s largest, in the Eastern Province of Saudi Arabia. It began operations in 2009 and produces 1.2 million b/d of light Arabian crude, 320 million cubic feet a day (cf/d) of gas and 80,000 b/d of natural gas liquids (NGLs).

The expansion at Khurais, as well as the planned increase of 250,000 b/d at the Shaybah field in the Empty Quarter, will ease production at other oil fields and will not increase the kingdom’s 12.5 million b/d capacity.

Saudi Aramco was not available for comment when contacted by MEED.