Foreign firms bid for Saudi Aramco's Fadhili gas project - sources

DL Holdings

30/07/2015 14:14

By Reem Shamseddine 
    KHOBAR, Saudi Arabia, July 30 (Reuters) - Foreign 
engineering firms have submitted bids to build a gas plant in 
eastern Saudi Arabia for state oil giant Saudi Aramco  SDABO.UL  
at an estimated cost of $5 billion to $6 billion, industry 
sources said. 
    Aramco's decision to move ahead with the project at Fadhili 
is a sign that Saudi Arabia continues to make big investments 
that it views as key to its economic future, despite slowing or 
shelving some less vital projects as the plunge in oil prices 
since last year hurts state finances. 
    The new plant is to have a processing capacity of 2.5 
billion standard cubic feet per day (scfd) of sour gas from the 
onshore Khursaniyah and offshore Hasbah fields.  ID:nL6N0T92X7  
    South Korea's Daelim Industrial  000210.KS , Hyundai 
Engineering and Construction  000720.KS  and Britain's Petrofac 
 PFC.L  have bid for the project individually, the sources said. 
    In addition, three consortiums have been formed to bid: 
South Korea's GS Engineering and Construction  006360.KS  with 
Spain's Tecnicas Reunidas  TRE.MC , Italy's Saipem  SPMI.MI  
with Japan's JGC  1963.T , and South Korea's Samsung Engineering 
 028050.KS  together with Daewoo E&C  047040.KS . 
    The project is split into three construction packages for 
the gas processing unit, utilities and offsite facilities such 
as nitrogen, steam, power and water systems, and sulphur 
recovery. Some bidders are seeking only one package. 
    Aramco did not respond to a request for comment on Thursday. 
It said in its 2014 annual report, published in May this year, 
that the Fadhili gas plant "is on track to come onstream by 
2019". 
    It usually takes about two months to evaluate bids for such 
projects after they are submitted, industry sources said. 
    Fadhili, together with Aramco's other gas projects in Wasit 
and Midyan, are slated to add more than 5 billion scfd of 
non-associated gas processing capacity, which will help the 
company meet soaring domestic demand for industrial use and 
electricity generation in the world's largest oil exporter. 
    Gas production remains a top priority for Saudi Arabia as it 
wants to limit direct crude oil burning for electricity, thereby 
preserving its ability to increase oil exports. 
 
 (Editing by Andrew Torchia and Dale Hudson) 
 ((Reem.Shamseddine@thomsonreuters.com; +966503335202; Reuters 
Messaging: reem.shamseddine.thomsonreuters.com@reuters.net)) 
 
Keywords: SAUDI GAS/CONTRACTORS