Japan’s JGC has landed a sizeable onshore engineering, procurement and construction contract from Saudi Aramco for work on surface facilities meant for the Saudi state oil giant’s Abqaiq plants.
JGC was awarded the prized EPC job for the Abqaiq Dew Point Control project, two people familiar with the development told Upstream.
The facility involves three primary processing units: an oil processing unit, an NGL facility and a utilities unit.
“The contract is awarded and a formal announcement is likely to follow soon,” one person said.
The project was the first to be offered as a part of Aramco’s long-term agreement (LTA) grouping for onshore contracts, similar to the country’s contracting arrangement for offshore projects.
The Abqaiq Dew Point Control project was tendered to EPC players that are a part of the Zone-2 region of Aramco’s prestigious onshore LTA arrangement, Upstream understands.
A second person said the project is expected to be worth upwards of $500 million and involves brownfield work on the natural gas liquids facilities that are a part of the oil processing plant.
Aramco and JGC have yet to respond to Upstream queries on the award of the Abqaiq project.
Aramco’s Abqaiq plants facility is said to be among the world’s largest oil processing and stabilisation facilities, capable of handling up to 7 million barrels per day.
The Abqaiq Dew Point Control project involves work on the NGL facility.
This includes installation of a new de-ethaniser (DER) and propane refrigeration system, an upgrade of the dehydration system and installation of a new condensate stripper column.
In addition, the replacement of gas export compression trains is also said to be a part of the project’s workscope.
JGC is said to have pipped other key competitors that included French player TechnipEnergies, Italy’s Saipem, and South Korean players GS E&C and Hyundai E&C, project watchers said.
All five players are part of the LTA’s Zone-2 region that involves facilities south of Dhahran.
Eight leading EPC players were awarded deals under the LTA umbrella by Aramco in November last year for work on onshore brownfield oil and gas projects in the country.
These agreements are for a six-year base period and extendable for an additional six years.
The onshore LTA was formed as a part of Aramco’s new contracting strategy for oil and gas onshore brownfield and plant upgrade projects, similar to the company’s approach for the offshore LTA arrangement that has been active for several years.
The eight players that are a part of the onshore LTA include JGC, TechnipEnergies, Saipem, Egypt’s ENPPI, South Korea’s Daelim, GS E&C and Hyundai E&C and a grouping of local player Nasser Saeed Al-Hajri & Partners contracting with South Korea’s Samsung.
While the five players that competed for the Abqaiq dew point control project are part of the LTA’s Zone-2 region that involves facilities south of Dhahran, three other players — ENPPI, Daelim and the Al-Hajri and Samsung grouping comprise the Zone-1 region, north of Dhahran.
Multiple onshore brownfield and maintenance projects are likely to be tendered as a part of Saudi Arabia’s onshore LTA arrangement.
While some projects are likely to be offered exclusively to Zone-1 and Zone-2 players, few others could see all eight LTA players compete, project watchers said.
The scope of the onshore LTA's includes engineering, procurement, construction, start-up and pre-commissioning of each project, as well as the installation of the upgraded facilities in the designated operating areas, Aramco had said last year.
The contracts are established for a period of six years with an option to exercise another six years extension.
In addition, the LTA contracts aim to improve Aramco’s In-Kingdom Total Value Add (IKTVA) localisation programme that is a key part of its long-term strategy.
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