JGC confirms huge Zuluf contract award from Saudi Aramco

Japanese engineering titan JGC has confirmed the award of a key contract from Saudi Aramco involving its Zuluf incremental facilities project in the Persian Gulf.

The company said on Monday that, along with its subsidiary JGC Arabia, it has been awarded an engineering, procurement and construction contract by Aramco for the Zuluf AH (Arab Heavy) increment central processing facilities.

“JGC has received the orders for the construction projects for the core onshore GOSP (gas-oil separation platform) and utility facilities including water injection facilities,” it said.

While JGC did not confirm the value of the Aramco award, Upstream understands the two packages together are worth between $2 billion and $2.5 billion.

JGC said Aramco is promoting the Zuluf Arab Heavy Development Programme to meet its growing global energy demand and plans to increase crude production by an additional 600,000 barrels per day.

Zuluf expansion plans

The Zuluf expansion is a key element of Saudi Arabia’s strategy to increase its crude production capacity to 13 million bpdby 2027 and maintain its position as the world’s largest oil exporter.

The Package 1 contract awarded to JGC is described as 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, one person said.

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

Aramco 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.

Offshore awards

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 (NPCC) and a pairing of L&T with Oslo-listed Subsea 7 landed prized EPC packages for the huge expansion scheme.

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.