India's L&T wins gas plant contract in Saudi Arabia

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State-run Saudi Aramco has awarded India's Larsen & Toubro (L&T) a contract to build facilities including a gas processing plant for its Midyan gas field, state news agency SPA reported.

The world's top oil exporter is boosting its output of the natural gas needed to meet rapidly rising domestic power demand and supply raw materials to its strategically important petrochemical industry.

L&T will build a plant with a processing capacity of 75 million standard cubic feet per day (scfd) of non-associated gas and 4,500 barrels of condensate per day, the agency quoted Fahad al-Helal, executive director of project management at Aramco, as saying. The project is due to be online mid-2016, SPA added.

"The project will include building two pipelines of 98 km length to deliver sales gas and hydrocarbon liquids to a power plant near (the western city of) Duba," al-Helal said in a statement carried by SPA late on Monday.

This would enable efficient generation of power and avoid the burning of high-value diesel, it added.

SPA did not give a value for the contract but industry sources estimated it to be worth less than $300 million.

Midyan is one of the new gas fields in northwest Saudi Arabia to produce gas for power plants and potentially supply other industries in a region rich in iron ore deposits. It was discovered in the 1980s and has significant reserves.

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