Spanish and UK groups selected for Fadhili gas plant packages

16 September 2015

Saudi Aramco notifies Tecnicas Reunidas and Petrofac on three main contracts  

  • Fadhili is largest oil and gas scheme to be awarded in kingdom this year
  • Three main packages worth an estimated total of more than $4bn
  • Frontunner emerges for smaller pipeline package

Spain’s Tecnicas Reunidas (TR) and UK-based Petrofac have been selected by Saudi Aramco to execute the main packages on the Fadhili gas plant in the Eastern Province of Saudi Arabia, according to sources familiar with the project.

MEED revealed on 1 September that TR had submitted the low bids for packages 1 and 2 and that Petrofac had bid low for package 3.

It is understood that Aramco has since given notifications to these companies and is expected to officially award the engineering, procurement and construction (EPC) contracts in the coming weeks.

The low bid for package 1, which covers the central gas processing facility, came in at less than $2bn, while the proposal for package 2 – the offsites and utilities – was less than $1bn, according to sources.

TR was initially prequalified to bid in a consortium with South Korea’s GS Engineering & Construction, but the two companies split before the bid and TR submitted independent proposals for the packages.

For package 3, the sulphur recovery unit (SRU), Petrofac submitted a low bid of between $1.35bn and $1.7bn. Petrofac’s proposal was strongly contested by the second-lowest bidder – a consortium of South Korea’s Daewoo Engineering & Construction and Samsung Engineering – but Aramco eventually settled on Petrofac’s bid, according to several sources.

Aramco, TR and Petrofac could not be reached for comment.

Other bidders for one or more packages included South Korean groups Daelim Industrial and Hyundai Engineering & Construction, as well as a consortium of Japan’s JGC Corporation and Italy-based Saipem.

The scheme is the largest oil and gas project in Saudi Arabia likely to be awarded to EPC contractors in 2015, amid a period of subdued activity in the kingdom’s hydrocarbons sector.

The Fadhili plant will process sour gas from the Khursaniyah oil field and the Hasbah non-associated gas field. Aramco has ramped up its offshore non-associated gas operations in the Gulf in recent years, and is developing several fields in the region. These include the Karan, Hasbah and Arabiyah fields.

Much of the gas contained in the oil major’s Eastern Province hydrocarbons assets is sour, meaning it has a high sulphur content. This makes it more difficult to process than sweeter gas, which has minimal amounts of sulphur.

The project, along with other gas schemes at Wasit and Midyan, will go towards meeting rapidly growing domestic gas demand in the kingdom. Aramco is also pursuing production from shale gas assets in the north.

The budget for the Fadhili plant has been expanded to about $6.5bn, according to industry sources, up from initial estimates of $5bn.

UK-based Amec Foster Wheeler carried out the front-end engineering and design (feed) study for the project, which is expected to have the capacity to process 2.5 billion cubic feet a day (cf/d).

The plant will be built 30 kilometres southwest of the existing Khursaniyah gas plant.

Meanwhile, Consolidated Contractors Company (CCC) has emerged as the frontrunner to win the pipelines package on the Fadhili project, according to sources familiar with the scheme.

Athens-based CCC is one of several companies vying for the EPC tender, valued at an estimated $500m, with Turkish group Tekfen Construction also thought to have submitted a bid.

Aramco has also tendered an EPC contract for the site preparation works for the project. The frontrunners for this contract are the local Al-Muhaidib Group and Azmeel Contracting, according to sources, with the deal expected to be worth $100m.

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