Oil and Gas Field Machinery in Saudi Arabia

A Hot Tip about Extraction of Natural Gas in Saudi Arabia

Posted on: 27 May 2010


The Saudi Arabian Oil Company (Saudi Aramco), the world’s largest oil producer and the state owned company said that in 2009, it completed a multi-year, multiple mega-project programs that included new or expanded oil, gas and petrochemical facilities. Maximum sustainable crude oil production capacity was raised to 12 million barrels per day, and important increases were achieved in gas production and processing capacities. Furthermore, key support facilities such as water injection and distribution networks were also expanded or upgraded.


Saudi Aramco’s annual review figures show that recoverable crude oil and condensate reserves stand at 259.9 billion barrels and recoverable gas reserves – associated and non-associated are 263.0 trillion cubic feet. The average crude oil production per day was 8.9 million barrels, and raw gas to gas plants production was 8.3 billion standard cubic feet per day. The average production of natural gas liquids (NGL) per day was 1.0 million barrels.


Presently, Saudi Aramco has eleven upstream and downstream investment plans valued at around $58.45 billion to meet increasing world demand for energy. By the year 2020, Saudi Aramco’s daily production capacity of 12 million b/d will become 15 million b/d. Unassociated gas is also a priority for Saudi Aramco because it presently accounts for 44% of the Kingdom’s primary energy consumption. The expansion program will have foreign companies to boost oil refining capacity in Saudi Arabia and in overseas markets such as China. Saudi producing oil fields are having an 8% annual production decline. This means that Saudi Aramco has to introduce about 700,000 b/d in additional capacity every year to make-up for lost production.


Another report stated that in an effort to reduce high costs of previously tendered projects, and due to the recent downfall in prices of commodities, building, and construction materials; Saudi Aramco and its joint venture partners have started re-tendering contracts. Re-negotiated prices on some projects have set a precedent. It is reported that Saudi Aramco will be easing conditions for contractors to reduce construction costs. Saudi Aramco’s clients are expecting reductions on project management consultancy contracts. Changes in Saudi Aramco’s commercial terms are centered on cash flow and performance bond requirement of contractors.


A news report has mentioned that Saudi Aramco is asking joint venture companies, who are bidding for five engineering contracts to list on the Saudi stock exchange (Tadawul) by the year 2015. Saudi Aramco has requested that contractors bidding for the deals provide a comprehensive business plan for the next six years from 2010-2015.


Best Prospects/Services

Saudi Aramco’s planned expansion projects throughout Saudi Arabia will generate a demand over the next five years in billions of US dollars for high quality oil and gas industry related products, supplies, and services.


These include: oil and gas field drilling machinery and equipment; casing, pipes, pipe fitting, and valves; power generation equipment; drilling chemicals; pumps, heat; exchangers, gas compressors, tower coolers; instruments and controls; anti-corrosion systems; laboratory equipment; marine equipment and services, offshore platforms, filtration systems, pressure vessels; storage systems, treatment systems; injection equipment and services; production equipment and services; well control systems, packing, seals, gaskets, bearings, rope, wire rope and chain; safety and environmental protection services; pollution and spill control services; tools, flexible pipe, valves & actuators; wellhead valves; and thousands of other items related to the oil and gas industry.




Saudi Aramco’s awarded/planned projects include:

• Marine works bid in January 2010 for $100 million package in Ras Tanura Oil Refinery. This is a $20 billion joint venture between Saudi Aramco and Dow Chemical Co. (US)

• Expand Saudi Aramco Lubricating Oil Refining Co. (LUBREF) at the city of Yanbu on the Red Sea. Saudi Aramco and its joint venture partner the local Jadwa Industrial Investment Co. will invite pre-qualified contractors in January 2010.

• Saudi Aramco and its joint venture partner ConocoPhillips (US) are planning to build a $10 billion 400,000 barrels/day export oil refinery at Yanbu on the Red Sea by 2014.

• The Ministry of Petroleum & Mineral Resources is planning to build a 250,000-400,000 b/d oil refinery at the city of Jizan on the Red Sea. Estimated cost of the oil facility is $7 billion.

• Saudi Aramco Shell Refinery Co. (SASREF), which operates a 300,000 b/d oil facility, will invite pre-qualified contractors in the first quarter of 2010 to bid for a contract to build a sulfur treatment unit at SASREF in Jubail Industrial City.

• Saudi Aramco has awarded in Oct. 2009 the local M.S. Al-Suwaidi Industrial Services Co. a $200 million contract to upgrade 14 bulk storage plants. In the first week of Oct. 2010, Saudi Aramco invited pre-qualified companies to submit bids to build a $250 million bulk storage facility at Wasea, southwest of the city of Riyadh. It is expected that the wining contractor will be awarded the project by the end of Dec. 2009.

• Saudi Aramco and its joint venture partner Total Refining & Petrochemical Co. (SATORP) are planning to build a $9.6 billion export oil refinery in Jubail with a 400,000 b/d capacity.

• In April 2009, Saudi Aramco Mobil Refinery Co. (SAMREF) in Yanbu awarded a $400 million contract to WorleyParsons (Australia) to lower the sulfur content of gasoline produced at its 400,000 b/d refinery. Saudi Aramco has plans to introduce new ultra-low-sulfur diesel facilities in its oil refineries in Riyadh and Jeddah by the year 2012. It seems that Saudi Aramco has started a multi-billion dollar scheme to reduce sulfur content in processed fuels to meet US environmental regulations on gasoline imports that come into force in 2013.

• Saudi Aramco has planned to increase the production capacity of its Arabiyah gas processing plant in the Eastern Province from 1 billion cubic feet a day (cf/d) to 1.2 billion cf/d. Work will finish at the plant in December 2013, and operations will begin in February 2014. Production capacity at the Shaybah gas project – in the Empty Quarter will also increase from 1.4 billion cf/d to 1.5 billion cf/d. The plant will be completed in March 2014, and operations will start in May the same year.

• Developing Manifa offshore oil field at a cost estimated at $11 billion to produce 900,000 b/d of heavy crude oil by 2011.

• Upgrade the acid gas piping system at Saudi Aramco’s Shedgum gas processing plant in the Eastern Province. Work will be completed by the end of 2010.



Read the full market research report


Posted: 27 May 2010

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