Saipem picks up $2 billion job at huge oil & gas field in Middle East

Following a recent string of multibillion-dollar offshore assignments in the Middle East, Italy’s engineering, drilling, and construction services provider Saipem has won another such deal for work at an oil and gas field off the coast of Saudi Arabia, which the country’s energy giant Aramco operates.

Saipem believes that the most recent contract reinforces its long-standing presence in the Kingdom of Saudi Arabia in the wake of the recent wave of awards, including two offshore jobs for work at three fields, valued at approximately $500 million, and the engineering, procurement, construction, and installation (EPCI) activities to be carried out on three other fields, worth $1 billion, which were all secured with Saudi Aramco.

After the completion of the bidding procedure and the occurrence of the usual preliminary conditions requested by Aramco, the Italian player’s new offshore contract, obtained under the existing long-term agreement (LTA) with the Saudi energy heavyweight, will bring around $2 billion to the company for operations related to the development of the Marjan field in the Arabian Gulf, which is located off Saudi Arabia’s east coast and perceived as one of the region’s largest oil and gas fields.

Under the terms of the deal, Saipem’s scope of work involves the engineering, procurement, construction, and installation of wellhead platforms’ topsides and jackets, along with tie-in platform jacket and topside, rigid flowlines, submarine composite cables, and fiber optic cables. The Italian giant will deploy its local offshore fleet, including dynamic positioning vessels and advanced welding technology to get the work done while leveraging its engineering expertise.

According to the company, the fabrication activities will be executed at the Saudi fabrication yard, Saipem Taqa Al-Rushaid Fabricators (STAR), located in Dammam, which is expected to enhance the local content and develop the capabilities of the industry in the area. The firm’s contract for the Marjan field comes shortly after Offshore Oil Engineering (COOEC) announced the delivery of a new eight-leg platform, described as the heaviest and most powerful China-made international offshore oil and gas platform in Qingdao, Shandong.

The U.S.-based McDermott and COOEC got a contract, worth more than $3 billion, in 2019 as part of Saudi Aramco’s push to boost production from the Marjan field while the U.S. player also secured a separate $1.5 billion deal for the Marjan Package 4. The Marjan increment program is an integrated development project for oil, associated gas, non-associated gas, and cap gas from the Marjan offshore field, encompassing a new offshore gas oil separation plant, and 24 offshore oil, gas, and water injection platforms.

With the capacity to collect and transport 24 million metric tons of crude oil and 7.4 billion square meters of natural gas, COOEC’s new Marjan platform is mainly designed for collecting and transporting offshore oil and gas to land for processing. The Chinese firm highlights that the Saudi platform, which weighs over 17,200 tons, is taller than a 24-story building and boasts a deck area equivalent to 15 basketball courts.

Aside from the Saudi Arabian bundle of offshore contracts, Saipem also landed a $4 billion deal in the Middle East for an offshore project designed to help maintain natural gas production from the biggest field off the northern coast of Qatar.

This engineering procurement and construction (EPC) package was awarded by QatarEnergy LNG, a subsidiary of Qatar’s state-owned energy giant QatarEnergy, for the field’s production sustainability offshore compression program, aimed at sustaining the production of the natural gas reservoir.