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Saudi Aramco awards contracts for $13bn gas project

KHOBAR (Saudi Arabia), July 20, 2016

State oil giant Saudi Aramco signed four engineering contracts to build its Fadhili gas processing project, the company announced at a press conference on Wednesday.

Saudi Aramco president and CEO Amin H Nasser today presided over a signing ceremony, marking a new milestone in the company’s drive to expand gas production and supply to meet growing domestic demand for energy.

The new Saudi Aramco mega project will help boost production and supply of clean-burning natural gas, lessening dependence on oil for power generation, said an Aramco statement.

Ten contracts were awarded earlier, and today Saudi Aramco signed four additional, major contracts. They include:
1. Larsen & Tubro for Fadhili offshore facilities;
2. Saudi KAD for Fadhili downstream;
3. Saudi Electric Company and Engie for the Fadhili Combine Heat & Power (CHP); and
4. Al Subeae & Sons Investment Holding Company for the Fadhili residential camp

Joining the Saudi Aramco management team at the ceremony were CEOs and executives from engineering, procurement and construction (EPC) companies, and other service providers involved in the development and execution of the Fadhili gas project.

Scheduled to be completed by the end of 2019, the Fadhili gas project will become a key component of the kingdom’s master gas system, processing gas from both onshore and offshore fields.  

Together, with Wasit and Midyan, Saudi Aramco’s two other new major gas projects, Fadhili will add more than 5 billion standard cubic feet per day (SCFD) of non-associated gas processing capacity.

The increase in the supply of natural gas will grow above 17 billion SCFD by 2020, enabling opportunities in Saudi industries such as steel, aluminum, and downstream value-added industries.  

The project will be developed at a total cost exceeding SR50 billion ($13.3 billion) with emphasis placed on in-kingdom expenditures, benefiting localisation initiatives that will reach 40 per cent of the total cost, Aramco said.

The plant is expected to accommodate 4,500 jobs for Saudis between professional training and permanent and temporary jobs, said Aramco in its statement.  

A dedicated training centre is expected to be established in the area in collaboration with governmental agencies focused on human resource development.

The Fadhili training programme, to be set up in partnership with project contractors, will provide Saudi nationals with opportunities to gain work experience and technical skills. Furthermore, partner contractors will sponsor developing young engineers at their offices across the world.

Nasser said: “Saudi Aramco’s multi-billion dollar investment in Fadhili will considerably increase the share of gas in the kingdom’s energy mix and fits in with our long term strategy to lower emissions. Gas will be of vital importance to the kingdom’s ongoing industrial diversification and economic development while enabling better energy efficiency in the utility sector.  The increased gas production will mean more feedstock for industries to expand, and new ones to emerge that will help drive job creation, a key objective of Saudi Vision 2030.”

Nasser added: “On its own, Fadhili is a pacesetter among mega projects in Saudi Arabia where local sourcing and manufacturing for goods and materials will reach 40 percent, as well as being the first Saudi Aramco project to run on low Btu (British thermal unit) gas. Environmentally, it’s also unique as it’s designed for maximum sulfur recovery of 99.9 per cent, utilising the Tail Gas Treatment process, reflecting Saudi Aramco’s pioneering environmental stewardship.”
Specifically, Fadhili will process a total of 2.5 billion SCFD of non-associated gas, including 2 billion SCFD of Hasbah offshore gas and 500 million SCFD of Khursaniyah onshore gas. It is expected to produce 1.5 billion SCFD of sales gas, 4,000 metric tonnes per day of sulphur, and will supply 470 million SCFD of gas to an adjacent cogeneration power plant, which will provide Fadhili with power and steam requirements, and also supply about 1,100 megawatts of electricity to the domestic grid.

Saudi Aramco is also exploring future opportunities of environmental significance at Fadhili, which may include a helium recovery plant and a CO2 recovery unit to reduce emissions.-TradeArabia News Service

Tags: Saudi Aramco | gas project |

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