Saudi Aramco: Arabiah EPC deal, denies profits

Bloomberg has reported that Saudi Aramco made a net profit of USD33.8 bn in the first six months of 2017, making it the world’s most profitable company.

It is almost totally free of debt and enjoys production costs running at a fraction of the industry standard. The eye-catching numbers, if accurate, mean that the secretive Saudi energy giant is more profitable than Microsoft, JP Morgan and ExxonMobil combined.

Saudi Aramco said in a statement: “This is inaccurate, Saudi Aramco does not comment on speculation regarding its financial performance and fiscal regime.”

Saudi Aramco selects Arabiah contractor

Meanwhile, the Dhahran-based petroleum and natural gas company has selected SNC-Lavalin to install additional facilities for a major gas processing facility in Saudi Arabia’s Eastern Province. SNC-Lavalin will construct the Arabiah condensate handling facility and sour water disposal unit project at the Wasit gas plant. Work is already underway with a target completion date of late 2019.

saudi aramco. SNC lavalin

The Capital Projects and Contracts (CapProCon) e-newsletter, distributed every Monday, includes dozens more updates and developments. To learn more, click here.

Capital Projects – news in brief – April 18, 2018

A quick round up of major capital projects and industry developments witnessed this week. To learn more about the CapProCon e-newsletter, click here.

New Zealand’s Prime Minister Jacinda Ardern said her government “has a plan to transition towards a carbon-neutral future, one that looks 30 years in advance”. In a bid to hit this target, New Zealand will grant no new offshore oil and gas exploration permits.

The ban applies only to new permits and will not affect the existing 22 offshore exploration blocks in the energy-rich Taranaki region. The move by New Zealand comes weeks after Shell sold its final oil and gas permits and producing assets to Austrian firm OMV.

Oil capital projects

Also the oil and gas arena, BP said it has approved the development of Ghazeer, the second phase of the giant Khazzan gas field in Oman, in cooperation with Oman Oil Company Exploration & Production. The final investment decision (FID) for Ghazeer follows the successful start-up of Khazzan’s first phase of development in September 2017.

BP also revealed that it has established a strategic alliance with Petrobras committing to exploring potential commercial agreements in upstream, downstream, trading and across low carbon initiatives, inside and outside Brazil.

In the civil infrastructure field Reliance Infrastructure (RInfra) and Tata Projects have won five contract packages for the Mumbai Metro line-4 project. Meanwhile, construction of the 473 km-long four-lane highway between Nairobi and Mombasa, Kenya, will be delayed amid concerns that the country is taking on too much debt.

The Capital Projects and Contracts (CapProCon) e-newsletter, distributed every Monday, includes dozens more updates and developments. To learn more, click here.

New Zealand capital projcts
New Zealand has banned all new offshore oil and gas exploration permits. Source: Wikimedia Commons – Wikikiwiman

Renewable energy projects take off

This renewable energy project news was first reported in the CapProCon e-newsletter. To learn more, click here.

Vattenfall has been awarded the permit for the first non-subsidised wind farm in the Netherlands, the 700-750 MW Hollandse Kust Zuid project.

This is the company’s second offshore wind project in the Netherlands. Vattenfall previously announced that it intends to invest EUR 1.5 bn in growth investments in the wind power sector between 2017 and 2018.

vattenfall renewable energy ofshore netherlands

Bayerische Warenvermittlung (BayWa) will enter the Dutch solar market and acquire a 70 percent stake in a project pipeline of around 2,000 MW of solar plants from a consortium of GroenLeven Group, which will retain a 30 percent stake.

In the Middle East, Dubai Electricity and Water Authority (DEWA) has broken ground at the 700 MW fourth phase of the Mohammed bin Rashid Al Maktoum solar power plant.

The project, which features the world’s tallest solar tower measuring 260 m-tall and the world’s largest thermal energy storage capacity, will reduce 1.4 million tonnes of carbon emissions a year, says DEWA.

This development will use two technologies for the production of clean energy: the 600 MW parabolic basin complex and the 100 MW solar tower over a total area of 43 sq km. Approximately AED14.2 billion (USD3.86 bn) will be invested in the project.

 

Saudi Aramco megaprojects approved

Oil and gas major Saudi Aramco has signed agreements with several oil and gas service contractors for projects in Saudi Arabia. The eight deals are worth a combined USD4.5 bn.

Three agreements were signed with Técnicas Reunidas as part of Aramco’s gas compression programme. The project will improve and sustain gas production from Haradh and Hawiyah fields for the next 20 years and will bring an additional 1 bn standard cu ft per day online.

A deal was signed with Saipem for the Hawiyah Gas Plant (HGP) expansion project. This involves the construction of additional gas processing facilities to process raw sweet gas.

Deals

Aramco also signed a deal with China Petroleum Pipelines covering the free flow pipeline contract for Haradh and Hawiyah; an engineering and project management services deal was signed with Jacobs Engineering for the Zuluf field development plan; Abu Dhabi-based National Petroleum Construction Company (NPCC) will execute the pipeline and trunk line project at the Safaniyah field; and the slipover platforms and electrical distribution platform project at the Safaniyah field will be performed by McDermott Middle East.

Saudi Aramco president and ceo, Amin H. Nasser, said: “Investments like these help secure Saudi Aramco’s preeminent position as a reliable supplier of energy domestically and to the world. They also reflect our concerted effort, as stated in Saudi Vision 2030, to diversify our economy, promote local manufacturing, support a sustainable environment, and strengthen our business and investment climate with the domestic private sector through fruitful international partnerships.”

Saudi Aramco megaprojets

CapProCon reported in July that Nasser, speaking at the World Petroleum Congress in Istanbul, said the role of oil as a vital source of energy is expected to continue in the long term, despite the growth of alternatives.

Nasser predicted a doubling in size of the world economy over the next 25 years, plus an additional two billion energy consumers. This will result in a lengthy energy transition that alternative sources such as renewables cannot adequately support.

“Saudi Aramco plans to invest more than USD300 bn over the coming decade to reinforce our preeminent position in oil, maintain our spare oil production capacity and pursue a large exploration and production programme centered on conventional and unconventional gas resources,” he stated at the time.

Duqm appoints PMC and confirms EPC awards

Oman’s Duqm Refinery appointed Amec Foster Wheeler Engineering Consultancy (AFW) as the project management contractor (PMC) for the refinery’s engineering, procurement and construction (EPC) phase.

The following EPC contracts for the refinery have been conditionally awarded: EPC 1 (process units) – Técnicas Reunidas and Daewoo Engineering & Construction; EPC 2 (utilities and offsites) – Petrofac and Samsung Engineering; EPC 3 (offsite facilities) – Saipem.

The Duqm Refinery project, when completed, will have a refining capacity of approximately 230,000 barrels of oil per day (bpd).

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Source: Duqm Refinery

Duqm Refinery

JV to build Israeli hydro station

GE Renewable Energy, in joint venture with SinoHydro, has booked a turnkey contract with Star Pumped Storage for the 344 MW Kokhav Hayarden hydro pumped storage station, the second to be installed in Israel.

GE Renewable Energy is responsible for the design, manufacture, supply and installation of all electromechanical and hydromechanical equipment, as well as complete balance of plant for the two 172 MW pumped-storage units.

The project development is planned to last 52 months, with commissioning expected in 2021.

GE
GE pumped storage system.

Source: GE

EPC contracts awarded for Duqm Refinery

Petrofac, in a 50/50 joint venture with Samsung Engineering, has received notification of intent to award a contract worth approximately US2 bn with Duqm Refinery and Petrochemical Industries (DRPIC) in the southern part of Oman.

Work on the 47-month project is expected to commence soon, said Petrofac. The contract is for engineering, procurement, construction, commissioning, training and start-up operations of all the utilities at Duqm.

The engineering, procurement and construction (EPC) contract for building the proposed 230,000 bpd Duqm Refinery’s main processing plants was awarded to a joint venture of Tecnicas Reunidas and Daewoo Engineering & Construction. Duqm Refinery is a joint venture between Oman Oil Company and Daewoo Engineering & Construction.

The contract for the building of a product export terminal at the Duqm port, dedicated crude storage tanks in Ras Markaz, and an 80 km pipeline connecting the two, has reportedly been awarded to Saipem. The contract is valued at USD800 mn.

Source: Petrofac
Source: Tecnicas Reunidas

Zarubezhneft to study Iranian oilfields

The National Iranian South Oil Company (NISOC) and Russia’s Zarubezhneft have signed a memorandum of understanding (MoU) to develop two oil fields in southwest Iran. The agreement allows Zarubezhneft to conduct technical surveys on Shadegan and Rag Sefid fields in Khuzestan Province.

Source: National Iranian Oil Co.

Saudi Aramco boss outlines energy transition demands

Speaking at the World Petroleum Congress in Istanbul, Turkey, the president and ceo of oil giant Saudi Aramco, Amin H. Nasser, said the role of oil as a vital source of energy is expected to continue in the long term, despite the growth of alternatives.

He reiterated in a keynote address to heads of state, government ministers, and executives that new investments are crucial to ensuring global energy security.

Nasser predicted a doubling in size of the world economy over the next 25 years, plus an additional two billion energy consumers. This will result in a lengthy energy transition that alternative sources such as renewables cannot adequately support.

“There’s a growing belief that the world can prematurely disengage from proven, reliable energy sources like oil and gas, on the assumption that alternatives will rapidly deploy,” Nasser said. “About USD1 tn in investments has been lost in the current downturn, concurrent to growing oil demand and the natural decline of developed fields. Conservative estimates suggest we need about 20 mn [additional] barrels per day (bpd) over the next five years to counter these effects.”

The volume of conventional oil discovered around the world halved over the past four years, compared to the previous four. This discovery shortfall could be the start of a cycle that may inhibit a future energy transition.

Nasser identified three areas that can build resilience and discipline for the transition: available supplies; cost structure and portfolio integration; and emissions reduction.

“Saudi Aramco plans to invest more than USD300 bn over the coming decade to reinforce our preeminent position in oil, maintain our spare oil production capacity and pursue a large exploration and production programme centered on conventional and unconventional gas resources,” he added.

The company has identified refining and chemicals, among other areas, as key drivers of long-term value and growth. Furthermore: “We aim to double our natural gas production to 23 bn standard cu ft over the coming decade, and raise the share of gas in the Kingdom’s utilities to about 70 percent, the highest of any G20 nation,” Nasser said. “We have collaborated with many oil and gas companies to promote low-emission solutions, to include our commitment to the Oil and Gas Climate Initiative’s USD1 bn investment fund to develop and rapidly deploy those technologies.”

Amin H. Nasser, Saudi Aramco
Amin H. Nasser, Saudi Aramco

Source: Saudi Aramco

Total signs South Pars deal

Total and the National Iranian Oil Company (NIOC) have signed a contract for the development and production of phase 11 of South Pars (SP11), the world’s largest gas field.

The project will have a production capacity of 2 bn cu ft per day, or 400,000 barrels of oil equivalent per day including condensate. The produced gas will supply the Iranian domestic market starting in 2021.

SP11 will be developed in two phases. The first phase, with an estimated cost of around USD2 bn equivalent, will consist of 30 wells and two wellhead platforms connected to existing onshore treatment facilities by two subsea pipelines.

At a later stage a second phase will be launched involving the construction of offshore compression facilities, a first on the South Pars field, says Total.

Source: Total