Aramco invites bids for Wasit gas plant
Riyadh, June 27, 2010
State oil giant Saudi Aramco has invited companies to bid for the construction of the biggest gas plant in the kingdom, industry sources said on Sunday.
After completing a crude oil capacity expansion plan last year, the world's top oil exporter has focused on developing gas production to meet rapidly rising domestic demand.
Aramco has given no cost estimate for the Wasit plant, but industry sources said it would cost between $6 billion and $8 billion.
Twelve companies have passed Aramco's qualification process and can bid for each of the four construction packages. The packages are for a gas unit, a cogeneration power plant, a sulphur recovery unit with utilities and the final package is for a natural gas liquids (NGL) fractionation plant.
Bidding would close by September 29, the sources said and the contract would probably be awarded in January.
Canada's SNC-Lavalin has completed the front-end engineering and design (FEED) work for the plant, one source said. Wasit would process up to 2.5 billion cubic feet per day (cfd) of gas from the Arabiyah and Hasbah offshore gas fields.
Contractors also said they expected to receive tender documents for the Shaybah NGL project soon. That plant would strip out NGLs from gas while producing around 1.4 billion cfd for reinjection in 750,000 bpd oilfield.
Most of the kingdom's gas output is associated with oil, so when Saudi Arabia curbs crude output with Opec it loses some gas volumes.
Last year, Aramco's non-associated gas output exceeded for the first time associated gas output, it showed in its 2009 annual review.
Wasit along with Khursaniyah and Karan gas plants would help Saudi Arabia to process its targeted production increase of raw gas to 15.5 billion cfd by 2015 from 10.2 billion cfd.
Aramco expects overall sales gas production to exceed 13 billion cfd by 2020. - Reuters