Saipem garners $1 billion for two oil & gas projects at Middle Eastern offshore field trio

Italy’s engineering, drilling, and construction services provider Saipem has landed a new set of contract awards for work at oil and gas fields off the coast of Saudi Arabia, which the Saudi energy giant Aramco operates. The Italian player will get approximately $1 billion for these two assignments, strengthening its presence in the Middle Eastern country and bolstering its longstanding relationship with the Saudi oil and gas heavyweight.

While Saipem will deploy its construction vessels that are operating in the region for the offshore component of the two projects, the fabrication related to these projects will be executed at the Italian player’s Saudi fabrication yard, Saipem Taqa Al-Rushaid Fabricators, aiming to increase and develop the capabilities of local industry.

The latest batch with Aramco comes less than two months after Saipem picked up two offshore jobs with the Saudi energy heavyweight, worth approximately $500 million, for work on the Abu Safah field and the production maintenance programs of the Berri and Manifa fields.

The first of the latest offshore contracts duo, secured in Saudi Arabia under the existing long-term agreement with Aramco, will see Saipem handle the engineering, procurement, construction, and installation (EPCI) of three production deck modules (PDMs), 33 kilometers of subsea rigid pipelines with diameters of 12 inches and 16 inches, and 34 kilometers of subsea power cables.

The company will carry out the scope of work and installation activities related to these infrastructures in the Marjan oil and gas field for which Offshore Oil Engineering (COOEC) recently delivered the collection and transportation platform, said to be the heaviest and most powerful China-made international offshore oil and gas platform in Qingdao, Shandong.

The eight-leg Marjan platform is mainly designed for collecting and transporting offshore oil and gas to land for processing with the capacity to collect and transport 24 million metric tons of crude oil and 7.4 billion square meters of natural gas. With a weight of over 17,200 tons, COOEC claims that this Saudi platform is taller than a 24-story building and boasts a deck area equivalent to 15 basketball courts.

This is the first project with Aramco that got executed by COOEC as a general contractor of the consortium, which put the Chinese firm in charge of the construction, pre-commissioning, and loading of this highly integrated large platform, deemed to be configured with the largest and most sophisticated pipelines.

The U.S.-based McDermott and COOEC won a contract worth more than $3 billion in 2019 as part of Saudi Aramco’s push to boost production from the Marjan offshore oil field in Saudi Arabia while the U.S. player also secured a separate $1.5 billion deal for the Marjan Package 4.

The Chinese company underlines that the platform will empower the oilfield with “the greatest offshore oil and gas processing capacity in the world” once it has been placed in operation. The Marjan field is located in the Arabian Gulf, off Saudi Arabia’s East Coast, and is perceived as one of the region’s largest oil and gas fields.

The Marjan increment program is an integrated development project for oil, associated gas, non-associated gas, and cap gas from the Marjan offshore field, with the development program encompassing a new offshore gas oil separation plant, and 24 offshore oil, gas, and water injection platforms.

On the other hand, Saipem’s second contract with Aramco entails the EPCI of three jackets, five production deck modules, 22 kilometers of subsea rigid pipelines with a diameter of 16 inches, 5 kilometers of subsea flexible pipelines, and 35 kilometers of subsea power cables. This will all be installed in the Zuluf and Safaniyah oil fields.

Located about 200 kilometers north of Aramco’s headquarters in Dhahran, the three fields – Marjan, Zuluf, and Safaniya – are considered to be among the largest offshore oil fields in Saudi Arabia and Safaniya Offshore Producing Department (SOfPD), which falls under Saudi Aramco, is primarily focused on oil and gas production which covers these fields.

As the department’s main motivation for energy efforts is to meet its customers’ energy demands while reducing its carbon footprint and environmental impact, SOfPD has launched multiple initiatives to curb energy consumption in these areas, which aligns with Aramco’s long-term commitment to achieving net zero emissions by 2050.

The Saudi energy giant created a $1.5 billion sustainability fund in October 2022 to invest in the energy transition technology, planning to bankroll technologies that support the company’s announced Scope 1 and Scope 2 net-zero 2050 ambition in its wholly owned operational assets, as well as the development of new lower-carbon fuels.

SOfPD’s top major initiatives at the Marjan, Zuluf, and Safaniya fields include the Safaniya GOSP-4 total plant shutdown and mothballing for energy saving, as it was identified as a high-energy consumer with low oil production. Afterward, the oil production was not affected but a significant reduction in the energy consumption was observed.

Other initiatives are related to Safaniya electrical submersible pumps to power optimization, Zuluf field electrification for electrical submersible pumps, and once the evaluation of the ZG-4 power gas turbines showed they were aged, obsolete, and operating at low efficiency, a plan was established to hire a third party for rental power generation to meet the electrical energy requirements for Zuluf GOSP’s power recovery with diesel being used as a source of fuel for rental power generators.

SOfPD has achieved an energy improvement of 38.9%, which resulted in a reduction of 25.3 MWH during 12 months, thanks to these initiatives, leading to a major cost avoidance of $7.4 million. The Zuluf crude oil increment is expected to provide a central facility to process 600,000 bpd of crude oil from the Zuluf field by 2026.