Saudi Aramco Review 2016

Grabbing discounts

Saudi Aramco is taking full advantage of the steep discounts on offer from oil-field service providers to revive several projects that have taken a back seat amid low oil prices, industry sources say.

One such project now gathering momentum is the $2 billion clean fuels scheme at Saudi Arabia’s eastern Ras Tanura refinery, which was put on hold for nearly two years while Aramco re-evaluated its priorities, the sources say. However, with Aramco now seeking to boost its market share of clean fuel exports to Europe, and take advantage of a more favourable bid environment, the contract award looks set to take place this year.

"Aramco has invited service companies to go in and assess the refinery and the project scope," says one Saudi-based industry source, who adds that bids are expected to be lower than in previous years.

As they seek to keep up their work rates and retain their state-owned Mideast customers, which have shown greater financial resilience to the oil-price rout, international oil-field services providers have been more open to offering discounts to Aramco.

The Saudi firm expects to award several other domestic projects this month, including the second phase of its shale gas development in the northwest of the country, and the Hasbah offshore gas field expansion scheme, sources say. Both projects aim to boost gas supplies to the kingdom, which remain a national priority as domestic demand continues to rise.

The so-called System B shale gas project aims to add 200 million cubic feet (5.7 million cubic metres) per day of gas capacity. The gas will be piped from Turaif to the industrial city of Waad Al Shamal now under construction. Meanwhile, Hasbah envisages expanding production capacity by a further 2 billion cubic feet per day and piping the gas to the onshore Fadhili plant, which is also now being built.

Another project up for grabs involves a 220 kilometre pipeline to transport refined products from the Qassim refinery to a new plant at Hail. Bids for the project are expected soon.




More Stories



Tags