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Saudi Aramco Signs Engineering Contracts For $13.3B Gas Plant

Gas Processing Plant

The state-owned Saudi Arabian energy company, Saudi Aramco has announced that it has signed four engineering contracts for the construction on its Fadhili gas processing project. Construction is expected to be finished by 2019, and the plant will process gas from onshore and offshore deposits.

The project is valued at $13.3 billion. In the announcement this week, the company said that it anticipated that the new plant will shift the country’s energy usage away from oil. The plant will produce power and steam. The plant will also generate approximately 4,500 jobs in the country, both temporary and permanent. Saudi Aramco added that the new plant will increase the natural gas production of the country to 17 billion cubic feet per day by the year 2020.

Saudi industrial firms have said that their expansion plans have been hampered by a shortage of natural gas, and the country is looking to gas for power and for water desalinization, while exporting the nation’s crude oil. Saudi Aramco signed a contract with Saudi Electricity Company and the French company Engie for the construction. Larsen and Toubro, a company from India will work on the offshore facilities.

Contracts were also signed for downstream facilities and for a residential camp. The project will also include a 1,500 megawatt power plant that will supply 1100 megawatts for domestic power. As part of the overall contracts, Engie has agreed to purchase power from the plant for 20 years. Armin Nasser, the CEO of Saudi Aramco stated: “Fadhili underscores Saudi Aramco’s resolute focus on long-term strategies, despite the weak market conditions,”

Fadhili will process 2.5 billon standard cubic feet per day (SCFD) of non-associated gas, which will include 2 billion SCFD of offshore gas and 500 million SCFD of onshore gas. The plant will produce 1.5 billion SCFD in gas sales.

Lincoln Brown for Oilprice.com

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