Saudi Arabia hogs limelight as contractors flock to kingdom

2006 is a boom year in Saudi Arabia with many projects underway

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By  Jyotsna Ravishankar Published  February 7, 2006

The year 2006 will be the year of the Saudis, according to most oil and gas contractors and oilfield suppliers contacted by Oil&Gas Middle East. State-owned Saudi Aramco will be handing out mega projects, each worth many millions of dollars, individually or in conjunction with joint venture partners, say these contractors. Some of them, like Zamil Steel of Saudi Arabia, have already won major projects at the end of last year, and are fighting against tight schedules for timely completion. Last August, Zamil won a US $11 million project for the supply of steel works to the natural gas liquids (NGL) plant under construction in Hawiyah. The Hawiyah plant’s projected handling capacity will be four billion standard cubic feet per day (scfpd) to make it the world’s largest facility of its kind. “Twenty fours hours does not seem quite enough,” says Ashraf Esso, senior sales manager, Zamil Steel’s Structural Steel Division. “This year is going to be hectic for all of us, which includes our competitors, as I think there is enough work to go around,” he said. Esso also said Saudi Arabia was different from Kuwait or Iran, where large projects are also planned, in the aspect that it (Saudi Aramco) insists on completion of projects on a fast-track basis. Rob Blaker, business development manager, Chicago Bridge and Iron (CB&I), a US-based EPC contractor, agrees with Esso, while saying that business in Saudi is definitely robust. Blaker says the challenge the company faces in 2006 is obtaining the resources required to bid for the various tenders that are being put out. “We are being very selective this year, as we know there are going to be a great number of projects, and we cannot bid for everything that comes our way,” he says. Blaker also says that the resource constraint is a phenomenon many EPC contractors in the region are experiencing, paving the way for international companies to enter the region. Resource constraints would include both crunches in manpower, as well as availability of timely supplies for project completion. “Many international companies who never bothered with the Middle East are starting to make inroads with the projects that those of us present here do not have the time to bid for,” he says. Blaker also says Saudi Arabia will have far more projects than Qatar or Kuwait this year because of the number of expansions planned. Technip, the French EPC contractor, has also said that Saudi is going to take a large chunk of its resources, not only for new projects, but also for previously awarded ones. Saudi Aramco is planning both large scale onshore and offshore work this year. One of the major contracts that companies are bidding for entails the engineering, design and fabrication of drilling support structures in Zuluf, four production deck modules in Safniya and Zuluf, and a new tie in jacket and deck with associated bridge and related facilities. Another major turnkey contract planned is the installation of a gas pipeline to serve the Khursaniyah oilfield development.

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