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Saudi Aramco's top five developments so far in 2018

The list includes the Saudi Crown Prince's reported plans to sell shares of Aramco by 2021

Saudi Aramco, the state-run Saudi oil giant, has noted major advancements so far in 2018.
Saudi Aramco, the state-run Saudi oil giant, has noted major advancements so far in 2018.

Saudi Arabia's Crown Prince Mohamed Bin Salman appears determined to press ahead with plans to sell shares in state-owned oil giant Saudi Aramco, but what else has happened in 2018 at the company that many analysts believe is the most valuable business in the world? 

From a delayed initial public offering (IPO), oilfield development, and downstream expansion, to island-building and lucrative contract awards, Construction Week rounds up five of the most important developments noted so far in 2018 by Saudi Aramco. 

5. Six in race to win $6bn Berri oilfield contract 

It came to light in September that Saudi Aramco had prequalified up to six engineering, procurement, and construction (EPC) firms to work on the Berri Offshore Oilfield Increment Programme project, said to be one of the "largest" jobs tendered by the oil giant in 2018.

None of the firms have been revealed to date, but Scotland's NewsBase suggested Dynamic Industries and McDermott from the US; India’s Larsen & Toubro; Subsea-7; the UAE’s National Petroleum Construction; and Italy’s Saipem were among the names in the running for the job.

Located just north of Ras Tanura, Berri is an onshore and offshore field with a capacity of between 250,000 barrels per day (bpd) and 300,000bpd. The scope of the project includes assembling 10 production deck modules and developing 100km of subsea pipelines. 

A timeline is yet to be revealed for when Saudi Aramco will award the EPC contract for the Berri oilfield.

4. Chinese business wins big 

Chinese companies have continued their strong partnership with the world's largest oil exporter by participating in important Aramco projects this year.

China Harbour Engineering bagged a contract to build two man-made islands to support drilling activities in the Berri offshore oilfield. The two artificial islands will be called Site A and Site B and cover a total land area of 1.6ha and 26ha respectively. Both islands are expected to be completed in 2020.

While the value of the contract has yet to be disclosed, Aramco revealed some important details about the project: Sites A and B will be built near the shore on the northern and southern sides of the King Fahad Industrial Port causeway in Jubail, the largest industrial city in the world and home to the region's biggest petrochemical producer.

Meanwhile, China-based engineering, procurement, and construction company Sepco-2 awarded Ireland's Shanahan Engineering a commissioning service contract for a gasification project in Jazan. Under the terms of the agreement, the Irish sub-contractor will work alongside China's Sepco-2 on the Jazan Integration Gasification Combined Cycle (JIGCC) Power Block project.

3. Jacobs wins 'landmark' megaproject contract

US engineering giant Jacobs was awarded what it called a "landmark" project management contract for Aramco's Zuluf oil and gas megaproject located in the Arabian Gulf.

The giant project will see infrastructure mobilised that will allow Saudi Aramco to process up to 600,000bpd of crude oil. Crude products that will be stabilised offshore will be transported to the Juaymah crude oil terminal via newly-built downstream pipelines. Separated gas will be transported to the new Tanajib gas plant through a separate network of pipes.

When news of the contract broke in April, the petroleum and chemicals president at Jacobs, Vinayak Pai, called the Zuluf field "one of the most significant developments of its kind" that would help support Saudi Vision 2030 by improving energy sustainability.

2. UAE, Saudi join forces for mega refinery in India

A framework agreement to build a mammoth oil and petrochemicals mega refinery in Ratnagiri, India, was signed by Saudi Aramco, Abu Dhabi National Oil Company (Adnoc), and a three-party consortium of Indian energy companies.

The agreement, signed on 25 June, paves the way for a $44bn (AED168bn) refinery that will strengthen Aramco's and Adnoc's strategy to move downstream and help meet India's demand for fuel and chemical products.

Under the agreement, Adnoc and Aramco will build, own and operate the refinery alongside to the Indian tripartite consortium, which is made up of Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation. The three of them will jointly own a 50% stake in the JV outfit, while Adnoc and Saudi Aramco will share the remaining 50% proportion.

1. IPO

Saudi Arabia's Crown Prince Mohammed bin Salman recently told Bloomberg that he was committed to floating up to 5% of Saudi Aramco's shares by 2021, ending years of speculation about what could be the largest listing in stock market history.

The Crown Prince has said in the past that he believes that listing could be worth up to $2tn. 

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Construction Week - Issue 754
Nov 23, 2019