A single contractor is poised to win two substantial offshore contracts from Qatargas for work on the second stage of its North Field Sustainability project in what could be among the largest offshore deals to be awarded anywhere in the world this year.

Italy's Saipem is lined up for the awards, several people familiar with the development told Upstream.

The deals are a crucial element of Qatar's ambitious plan to significantly boost its liquefied natural gas output capacity by around two-thirds well before the end of this decade.

The Persian Gulf emirate is a leading producer and exporter of LNG, with current output of 77 million tonnes per annum.

Qatargas and parent Qatar Petroleum are working on the mega expansion project at the North Field that envisages ramping up the nation’s liquefaction capacity in two stages to 126 million tpa — an increase of 49 million tpa from current levels.

Multiple people familiar with the North Field Sustainability development told Upstream that Saipem recently received a confirmation from the Qatari state-controlled giant for work on two engineering, procurement, construction and installation contracts, together said to be worth upwards of $3 billion.

“Saipem has been selected by Qatargas this week as the preferred contractor for the two EPCI packages involving the North Field's sustainability project. We believe the contracts are likely to be signed within weeks,” one person said.

Once awarded, the two EPCI contracts comprising the second stage of the emirate’s North Field Sustainability project would be among the largest global offshore deals awarded during 2021, a second person said.

A Saipem spokesperson declined to comment, and QP did not respond to requests for comment.

Workscope on offer

The workscope for first offshore package includes at least four wellhead platforms and one additional jacket, nine riser platforms, one bridge-supported platform, bridges to connect riser platforms, clad subsea pipelines and subsea power cables, project watchers said.

In addition, the second EPCI job involves the laying of up to 270 kilometres of subsea pipelines.

This will comprise work on about 170 kilometres of 32-inch subsea pipelines and 100 kilometres of 38-inch subsea pipelines, he added.

In the first package, Saipem is believed to have pipped other bidders that included McDermott International and a grouping of South Korean giant Hyundai Heavy Industries with Malaysia’s Sapura Energy.

The additional bidders for the second package included McDermott, Oslo-listed Subsea 7 and a grouping of Switzerland-based Allseas with UK-based Petrofac, Upstream understands from contracting sources.

Spending spree

Qatar has been on a spending spree this year despite the challenging market conditions and state-controlled giant QP recently announced a final investment decision for its first expansion phase of its North Field that is likely to cost almost $29 billion.

The North Field Sustainability and North Field Expansion projects were among the first to be initiated by Qatar following the removal in 2017 of a 12-year self-imposed moratorium on further development of the field.

The second phase of the sustainability project is a crucial element of Qatar’s strategy to support gas production from the North Field and aims to sustain the existing gas production from the giant asset for years.

The fresh development phase of the North Field Sustainability project is substantially bigger than its previous expansion phase, which is being executed by McDermott.

In 2019, McDermott won a substantial contract — which was thought to be worth between $700 million and $800 million — for work on the previous stage of the sustainability project.

The contractor's workscope included the fabrication of six platform jackets as well as three associated topsides for the project in the Persian Gulf, with the construction work to be carried out at its Batam Island yard in Indonesia.

Qatargas awarded a key front-end engineering and design contract to Saipem for the second development phase of the sustainability project.

Field Development

Contractor giant poised to win two huge Qatar offshore deals at North Field