Saudi Arabia's H1 2019 oil and gas contracts 318% higher than 2018

USSABC report says H1 2019's $15.8bn oil and gas contracts mark a 318% hike on corresponding values for all of 2018

Saudi Aramco is the world's largest oil producer [representational].
Saudi Aramco is the world's largest oil producer [representational].

Contracts worth $15.8bn (SAR59.4bn) were awarded for Saudi Arabia’s oil and gas projects during H1 2019, a whopping 318% higher than the $3.8bn (SAR14.2bn) of contracts awarded in Saudi Arabia’s oil and gas sector during all of 2018, according to the Contract Awards Index published by US-Saudi Arabian Business Council (USSABC) for Q2 2019, which also found that Saudi Aramco’s contracts to American contractor McDermott are valued at approximately $5.4bn (SAR20.3bn) so far in 2019.

The oil and gas sector accounted for the bulk of $17.2bn (SAR64.3bn) contracts awarded in Saudi Arabia during Q2 2019, making up $12.7bn (SAR47.7bn) of the total amount.

Second-quarter oil and gas contract performance was led by two contracts, each worth $3bn (SAR11.3bn) and awarded by Saudi Aramco in June 2019.

The first of these contracts was awarded to a consortium of McDermott and China National Offshore Oil Corporation (CNOOC) for Package 1 of the offshore gas-oil separation platform’s (GOSP-4) construction at Marjan, due for completion by Q4 2022.

The Marjan Field Development project consists of new offshore facilities such as platforms and pipelines to link to a new gas facility in Tanajib on the Arabian Gulf, and from Tanajib to the expanded natural gas liquid (NGL) facility in Khursaniyah.

GOSP-4 will handle 475 thousand barrels of oil per calendar day (MBCD) of oil and 813 MBCD and 747 million standard cubic feet per day (MMSCFD) in associated gas, USSABC said in its report.

Saudi Aramco’s second $3bn contract in June 2019 was awarded to Saipem for the Berri field expansion project that includes low-pressure gas being sent to the Berri gas plant in Jubail, which will be expanded to recover more NGL and sulphur.

A GOSP will be built at the Abu Ali gas plant, and other facilities will be developed at the Khursaniyah gas plant to process 40 million barrels per day of hydrocarbon condensate. Completion on the scheme is expected in Q3 2022.

McDermott was also awarded work worth $1.5bn (SAR5.6bn) on the Marjan field development’s Package 4, which will see the American builder construct an offshore gas facility with a tie-in platform, two gas cap production wellhead platforms, non-associated gas production units, and other facilities.

Saudi Aramco also awarded a $1.48bn (SAR5.6bn) contract to South Korean contractor Hyundai E&C for the construction of Tanajib onshore oil facilities’ Package 6, including the construction of crude processing, gas compression, and dehydration trains at Tanajib’s existing onshore GOSP, USSABC said.

Upon completion by Q4 2023, Hyundai E&C’s Tanajib works are expected to process and stabilise an additional 300 MBCD of Aram Medium oil from Marjan, as well as debottleneck the existing GOSP.

Hyundai E&C was awarded another $1.3bn (SAR4.7bn) contract from Saudi Aramco as part of a consortium with Hyundai Engineering to carry out the construction of onshore utilities flare and pipe rack in Tanajib as part of the Marjan field development.

Additional work includes building power and water supply facilities for a plant that processes 2,500 MMSCFD, and the project is expected to be completed by Q1 2022.

Package 2 of the Marjan field development project was awarded by Saudi Aramco to the consortium of Subsea 7 and Larsen & Toubro, with the $1bn (SAR3.8bn) project including the construction of offshore oil facilities in Marjan.

USSABC said in its report that additional work within the project, due for completion by Q2 2023, includes the construction of four tie-in platforms, nine production deck modules, and associated facilities.

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