Saudi and German contractors enter energy business cooperation

06 December 2018
Firms to collaborate on energy projects across the full value chain in Saudi Arabia

Local Saudi contractor Arkad and Germany-based industrial contractor Bilfinger have signed a memorandum of understanding (MoU) for strategic cooperation in projects across the energy value chain in Saudi Arabia and the region.

The MoU will help both firms accelerate business growth in the kingdom, the firms said in a statement. It is not clear if the contractors are considering bidding in consortium for Saudi Aramco’s tenders going forward.

‘The agreement, in harmony with the [Saudi] Vision 2030, paves the way to harness the opportunities in the oil and gas, chemical, petrochemical, nuclear and renewable energy sectors with advanced solutions and services, while aiming at developing the local value chain and creating employment opportunities for Saudi workforce,’ the statement reads.

In an interview with MEED, Hani Abdulhadi, member of the management board of Arkad Group, said: “We will continue to push until we achieve what it takes to become a fully fledged EPC player. We have a big vision for Arkad; we are a national EPC company that wants to go international.”

Arkad is already executing a few Aramco projects. Arkad Engineering & Construction’s biggest win came in early 2016, when it was awarded three pipeline engineering, procurement and construction (EPC) jobs worth a combined $1.3bn. These were part of Aramco’s Master Gas System Expansion (MGSE) megaproject.

The firm is on track to complete its work on the three packages by the first quarter of 2019, Abdulhadi said in the interview.

A crude transport pipeline between the Mazalij and Abu Jifan oil fields – a $250m package forming part of Aramco’s Khurais increment programme that Arkad E&C has been working on since January 2015 – was also set to be delivered.

“We are currently bidding on a number of Aramco projects, including [packages within] the Marjan development and Berri development projects,” Abdulhadi said.

Aramco is investing in massive refining and petrochemicals projects, looking to expand its downstream portfolio. To meet that development, Arkad is diversifying its business to work on megaprojects such as the $25bn crude oil-to-chemicals project being jointly developing with Saudi Basic Industries Corporation (Sabic), and the $9bn expansion of the Aramco-Total joint venture (Satorp) into petrochemicals.

“We are looking at raising our engineering capabilities. We would like to take part in these major projects by Aramco,” Abdulhadi said.

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