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Reuters
State oil giant Saudi Aramco signed four engineering contracts to build its Fadhili gas processing project, the company said on Wednesday. The project is worth more than 50 billion riyals ($13.3 billion) and, when completed in 2019, will be the first programme 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 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.
‘Aramco not worried about others
gaining market share in Asia’
Saudi Aramco is not worried about competition from other producers raising their crude sales in Asia as the number of customers the state oil giant deals with is also increasing, its chief executive said.
Iraq overtook Saudi Arabia for the first time to be India’s top oil supplier in the June quarter, helped by sales of discounted heavy crude that refiners have also been using to make bitumen to build roads in the world’s No.3 oil consumer.
To combat attempts to steal market share, the kingdom’s oil giant this month slashed the August official selling price (OSP) of its benchmark light crude grade to Asia by the most in nine months and analysts warned it may need to make deeper cuts. But speaking on the sidelines of a company event, CEO Amin Nasser said Aramco was confident in its Asia business. “(Aramco offers) the reliability of supply and the quality of crudes, so various companies see big value and benefit in dealing with Aramco,” he said.