Japanese engineering titan JGC is in the frame for two sizeable onshore engineering, procurement and construction contracts from Saudi Aramco involving its Zuluf oilfield, promising incremental project in the Persian Gulf.

Several people familiar with the development told Upstream that Aramco recently handed over letters of intent for the two onshore EPC packages understood to be worth between $2 billion and $2.5 billion jointly.

The Zuluf expansion is a key element of Saudi Arabia’s strategy to increase its crude production capacity to 13 million barrels per day and maintain its position as the world’s largest crude exporter.

“JGC is in receipt of the LoI’s and a formal announcement is yet to be made by Aramco,” one person said.

The Package 1 contract is described the larger of the two and involves onshore processing facilities including two gas-oil separation plant trains, each with a capacity of 300,000 bpd of oil, plus two gas compression trains and wet crude handling facilities.

The Package 2 contract comprises water-injection pumps, a water-oil separation plant, a hot oil system, electrical and non-electrical utilities, plus other associated facilities.

In addition to JGC, South Korea’s Hyundai E&C and Samsung E&C, Italy’s Saipem, Spain’s Tecnicas Reunidas and India’s Larsen & Toubro (L&T) were said to be initially involved in the bid process.

Aramco and JGC are yet to respond to Upstream’s requests for comment on the Zuluf bid process.

The Saudi giant is carrying out multiple onshore and offshore EPC tenders for work on expanding the capacity of the Zuluf oilfield, signposting up to $7 billion worth of contracts.

Earlier this year, Aramco finalised awards worth more than $4.5 billion for five key offshore packages linked to the Zuluf oilfield expansion.

McDermott International of the US, Abu Dhabi’s National Petroleum Construction Company and a pairing of L&T with Oslo-listed Subsea 7 landed prized EPC packages for the huge expansion scheme, Upstream reported.

The Zuluf incremental project aims to boost oil output by up to 600,000 bpd, almost doubling its existing capacity.

The offshore oilfield currently produces 550,000 to 600,000 bpd of crude from the Arabian Medium reservoir. The next expansion phase will tap the field’s Arabian Heavy reservoir.

The Zuluf field is located around 40 kilometres offshore Saudi Arabia’s northeast coast in about 40 metres of water.

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