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Aramco closing in on four LTA awards

Saudi giant expected to select preferred contractors within weeks for quartet of offshore jobs

Source: Upstream, By Nishant Ugal

Saudi Aramco is said to be closing in on the award of a quartet of offshore contracts involving its long-term agreements (LTA) contracts with leading international contractors.

At least two people familiar with the tender process told Upstream that Aramco is expected to finalise awards within weeks for up to four offshore contracts that comprise brownfield jobs on its multiple oil and gas fields off the Opec linchpin nation.

“Nothing is finalised yet, but we are hearing that Aramco is very close to a decision,” one person said.

Aramco is likely to soon finalise its preferred contractors for LTA projects that include contract release purchase orders (CRPOs) 57, 59, 60 and 61, another source claimed.

The workscope for CRPO-57, which was tendered last year, includes the engineering, procurement and construction of four offshore wellhead jackets and four single-well observation platforms required for the Manifa and Qatif offshore fields. 

Italy’s Saipem is believed to be well placed for the offshore job.

CRPO-59, which was offered earlier this year to select LTA contenders, includes work on at least three new offshore wellhead jackets destined for the Zuluf, Ribyan and Abu Safah fields.

Upstream understands that UK-listed Lamprell and Malaysia’s Sapura Energy are involved in a two horse race for the offshore project.

In addition, CRPO-60 that was offered earlier this year involves brownfield work on the export platform at Juaymah.

Indian engineering giant Larsen & Toubro Hydrocarbon Engineering and McDermott International of the US are thought to be among the bidders for CRPO-60, but one person pointed out that other LTA players could also be involved in the bid process.

However, this could not be confirmed by Upstream. Aramco is also expected to soon finalise its preferred contractor for CRPO 61, which involves the EPC of one production deck module at Aramco’s huge Marjan field.

Saipem, Lamprell and Sapura Energy are expected to battle it out for this job, while other LTA players are also in with a chance, one project observer said.

While the LTA projects involve relatively smaller brownfield jobs, the progress underlines Aramco’s intention to press on with such projects despite industry headwinds.

Up to 10 contractors are a part of Aramco’s prestigious LTA arrangement.

Those include Sapura Energy, China’s Offshore Oil Engineering Company (COOEC), a pairing of Lamprell and Dutch player Boskalis, a grouping of UK-based TechnipFMC and Malaysia Marine & Heavy Engineering, McDermott and Dynamic Industries of the US, Saipem, a partnership of Larsen & Toubro Hydrocarbon Engineering with Oslo-listed Subsea 7 and Abu Dhabi’s National Petroleum Construction Company.

South Korean giant Hyundai Heavy Industries was also recently inducted into the LTA arrangement, but is unlikely to be involved in these tenders.

Aramco has been pressing ahead with key brownfield and offshore maintenance projects this year, despite the Covid-19 pandemic and oil price meltdown. However, large-scale capacity expansions and greenfield developments are being pushed forward until the market situation stabilises.

Upstream reported last week that Aramco is poised to further delay the execution of its Marjan and Berri incremental programmes.

In addition, it is also expected to delay the tender process, at least until next year, for its multi-billion-dollar Zuluf field expansion project.

Together, the Marjan, Berri and Zuluf projects are likely to add more than 1 million barrels per day to Aramco’s oil production capacity in the long term.

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