SNC-Lavalin, KBR, front-runners to land Saudi gas projects

GAS RACE: SNC-Lavlin and KBR in race to seal Saudi gas deals. (Getty Images)

Canada's SNC-Lavalin Group Inc. and US firm KBR lead the race for deals for early design and engineering at two gas projects in Saudi Arabia, industry sources have said.

The projects are at the Moneefa and Shaybah oilfields, and are planned to meet rising domestic demand for gas and feedstocks for petrochemical plants. The world's largest oil exporter is rapidly increasing petrochemical capacity as part of plans to diversify its economy.

Saudi Aramco has not officially revealed plans to carry out the projects. An Aramco spokesman declined to comment on them.

SNC-Lavalin is the lowest bidder on both projects but Aramco was unlikely to award both deals to the same company, Saudi-based contractors said.

KBR, which only submitted bids for the bigger Shaybah gas project, was expected to win that deal, they said.

Heather Browne, Director of Corporate Communications at KBR confirmed to Reuters in a recent e-mail that the major engineering and construction firm was only bidding for Shaybah.

She declined to provide financial estimates.

"It's pretty much final, your information is correct," one contractor aware of the bidding process told Reuters when asked if SNC Lavalin and KBR would be selected.

The Moneefa gas development programme will provide for the production and processing of around 1 billion cubic feet per day (cfd) of Khuff gas from the Arabiyah offshore field.

An executive at Aramco told Reuters in May that the state-run firm would build another gas plant at Moneefa. That plant would process 1 billion cfd of gas from Arabiyah and Hasbah, he said.

Arabiyah is one of two offshore gas fields non-associated with oil that Aramco discovered in January. The other was Hasbah. It is unclear how much gas Arabiyah alone could pump, but the two together could supply 1.8 billion cubic feet per day (cfd) of gas.

The Moneefa programme is split into four projects that include gas processing facilities, two offshore gas platforms one tie-in platform to handle around 1 billion cfd of gas, subsea power and communication links and pipelines.

Aramco has yet to finalise how it would develop the gas processing facilities. It will either build a new plant at Moneefa or Jubail or expand existing facilities at Moneefa and Berri.

If Aramco decided to build a grass root plant at Moneefa or Jubail, the plant will produce around 750 million cfd of sales gas and 1700 tons per day of sulphur through two gas processing trains.

At Shaybah, the three main projects cover a new natural gas liquids (NGL) recovery facility. The plant would strip out ethane, propane and natural gas liquids (NGLs) while producing around 1,400 million cfd of gas for reinjection in the oilfield.

Work also includes debottlenecking gas-oil separation plants at Shaybah and the installation of facilities at the Berri gas plant to split out NGLs from the recovery facility.

Aramco said the three other projects under the Shaybah programme would be carried out by a local design firm.

They cover the installation of a new pipeline from the Shaybah NGL recovery facility to Juaymah gas plant, site preparation for the NGL recovery facility and the expansion of residential and industrial complex at Shaybah. Facilities at Moneefa and Shaybah would be completed in 2014.

US Jacobs Engineering, France's Technip, Foster Wheeler, Fluor Corp and Worley Parsons also submitted bids to carry out the early design and engineering - and to manage the construction of the projects - on Aug. 22. (Reuters)

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