Tecnicas and Petrofac selected to build $4.7 bln Saudi gas project -sources (updated)

DL Holdings

15/09/2015 12:10

* Aramco selects contractors for Fadhili gas plant - sources 
    * Tecnicas get 2 contracts worth up to $3 bln combined 
    * Petrofac to receive $1.7 bln contract 
 
 (Adds detail, context) 
    By Reem Shamseddine 
    DUBAI, Sept 15 (Reuters) - Spain's Tecnicas Reunidas 
 TRE.MC  and Britain's Petrofac  PFC.L  have been selected for 
contracts worth as much as $4.7 billion to build the Fadhili gas 
plant in Saudi Arabia for state oil company Saudi Aramco, 
industry sources said on Tuesday. 
    "They received notification last week; a letter of intent," 
said one of the sources, who declined to be identified as the 
information isn't public. 
    Petrofac and Tecnicas declined to comment. Saudi Aramco said 
it does not comment on its business plans. 
    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 projects regarded as low priority as the plunge in 
oil prices since last year impacts 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  
    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. 
    Italy's Saipem  SPMI.MI  and South Korea's Daelim Industrial 
 000210.KS  had previously been said to be among the bidders, 
sources told Reuters in July.  ID:nL5N10A2AV  
    Tecnicas bid for two of the packages on its own, and for the 
third in conjunction with South Korea's GS Engineering and 
Construction, according to a second industry source. 
    Ultimately, the Spanish firm won the two packages in which 
it bid solo: for the gas processing unit for as much as $2 
billion and for utilities and offsites, worth as much as $1 
billion, according to the first industry source and a separate 
source. 
    Three sources confirmed that Petrofac won the package for 
sulphur recovery worth as much as $1.7 billion. 
    Aramco said in its 2014 annual review published in May that 
the Fadhili gas plant was on track to come onstream by 2019. 
    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. 
 
 (Additional reporting by Jose Elias Rodriguez in Madrid and 
Karolin Schaps in London; Editing by David Goodman and David 
Holmes) 
 ((davidj.french@thomsonreuters.com; +971 4 362 5864; Reuters 
Messaging: davidj.french.thomsonreuters.com@reuters.net)) 
 
Keywords: SAUDI ARAMCO GAS/FADHILI