Saudi Aramco signed four engineering contracts to build its Fadhili gas processing project, the company said on July 20.
The project is worth more than 50 billion riyals (US$13.3 billion) and, when completed in 2019, will be the first program in the kingdom to treat gas from both onshore and offshore fields.
The company signed a contract with Saudi Electricity Co. and France's Engie SA to construct the Fadhili plant, which will produce power and steam. A contract for work on offshore facilities went to India's Larsen & Toubro.
Two other contracts, awarded to local companies, are for downstream facilities and a residential camp. Other contracts for the project were signed late last year.
"Fadhili underscores Saudi Aramco's resolute focus on long-term strategies, despite the weak market conditions," said Aramco's Chief Executive Amin Nasser.
The Fadhili project aims to boost Saudi gas production capacity to more than 17 billion standard cubic feet per day by 2020, a top energy priority in Saudi Arabia outlined in the kingdom's National Transformation Plan.
Many industrial firms have complained about a gas shortage crimping expansion plans. The kingdom is also trying to use more gas for power generation and water desalination instead of burning crude oil, which it wants to export.
"Using low Btu (British thermal unit) gas, where technically viable, as a substitute for conventional gas [methane] will extend the availability of gas supplies within the kingdom during periods of peak gas demand," Sadad al-Husseini, a former senior executive at Aramco, said of the project.
The plan for Fadhili includes a 1,500-megawatt (MW) power plant, which will use 400 MW of electricity to power the gas project and send the remaining 1,100 MW to the domestic grid.
Engie has signed an agreement which will ensure the power produced by the plant will be bought for 20 years. (US$1 = 3.7504 riyals)
Recommended Reading
DXP Enterprises Buys Water Service Company Kappe Associates
2024-02-06 - DXP Enterprise’s purchase of Kappe, a water and wastewater company, adds scale to DXP’s national water management profile.
ARM Energy Sells Minority Stake in Natgas Marketer to Tokyo Gas
2024-02-06 - Tokyo Gas America Ltd. purchased a stake in the new firm, ARM Energy Trading LLC, one of the largest private physical gas marketers in North America.
California Resources Corp., Aera Energy to Combine in $2.1B Merger
2024-02-07 - The announced combination between California Resources and Aera Energy comes one year after Exxon and Shell closed the sale of Aera to a German asset manager for $4 billion.
Vital Energy Again Ups Interest in Acquired Permian Assets
2024-02-06 - Vital Energy added even more working interests in Permian Basin assets acquired from Henry Energy LP last year at a purchase price discounted versus recent deals, an analyst said.
DNO Acquires Arran Field Stake, Continuing North Sea Expansion
2024-02-06 - DNO will pay $70 million for Arran Field interests held by ONE-Dyas, and up to $5 million in contingency payments if certain operational targets are met.