Petrofac lands US $200m Egypt gas plant contract

Petrofac has been awarded a US $200 million lump sum EPC contract by Khalda Petroleum Company (KPC).

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By  James Buckley Published  December 5, 2006

International oil and gas facilities service provider, Petrofac, has been awarded a US $200 million lump sum engineering, procurement and construction (EPC) contract by Khalda Petroleum Company (KPC). This will fund the building of a new gas processing facility in the Salam area in Egypt. The project, scheduled for completion by the end of 2008, will use local construction and fabrication company, Petrojet. KPC is adding the third gas processing train (SGT3) to process gas from its new discoveries. Petrofac, which has not housed operations in Egypt since the late 1990s, is keen to benefit from the country’s recent growth. “In the last four to five years, Egypt has seen tremendous growth in the oil and gas sector and there is greater expenditure in the market. It offers substantial growth in both the immediate and long term and we are well positioned to build a strong capability in that sector,” said Maroun Semaan, CEO of Petrofac’s engineering and construction division. Despite increasing its total workforce by more than 50% during the last year alone, Petrofac remain committed to retaining close local relationships. “We are keen to develop our organisation and workforce from the local area through training programmes and special relations, supporting higher education colleges and institutions in the region,” said Semaan. Semaan attributes the company’s proximity to North Africa, the Caspian, Russia and the Gulf region, as being instrumental to its success in the Middle East. “These regions are within four to five hours flying time of the UAE and contain more than 70% of the world’s oil reserves. The fact that we are able to support clients who are only a few hours away, will keep us in pole position,” added Semaan. The contract follows the US $400 million deal awarded by BG Tunisia Limited (BGT) and Enterprise Tunisienne D’Activites Petrolieres (ETAP), the Tunisian state-owned oil and gas exploration and production company, to build the new Hasdrubal onshore gas processing facility and the LPG production facility. The facility will be located on the Tunisian coast between La Skhira and Sfax in Tunisia and is scheduled for completion in 2009. Semaan said Petrofac’s intentions within Tunisia were to “consolidate [its] position as one of the leading oil and gas contractors in the region, which [it] will achieve by continuously improving [its] delivery capabilities.” Semaan stressed that building new relations and knowledge of an area were among the benefits of expanding into new regions, and outlined the difference in approach towards the Egyptian and Tunisian markets. “In terms of production capabilities, Egypt is a much bigger market. However, the most mature markets with the greatest opportunities, are also where the biggest competition lies. Bigger markets attract larger players and more competitors. You have to strike the balance,” he said.

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