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McDermott ahead in race for Aramco's Safaniyah job

US contractor believed to be frontrunner for Saudi Aramco's EPC job at field off Saudi Arabia

US fabricator McDermott has pulled ahead in the race to secure another significant contract from Saudi Arabia's state oil company Saudi Aramco covering a fresh development phase at its Safaniyah offshore oilfield.

Industry sources told Upstream that McDermott has emerged as the frontrunner for the engineering, procurement and construction job for Safaniyah, which was initially believed to be worth about $500 million.

The Safaniyah upgrade tender, also known as CRPO-44, was originally issued by Aramco last year, but the tender process was delayed on several occasions.

However, project watchers have now suggested that Aramco is thought to have chosen McDermott as its preferred contracted and suggested that a contract is likely to be signed later this month.

The Safaniyah job was offered to Aramco’s five long-term agreement (LTA) contractors last year, before the coveted LTA list was expanded to include up to nine players.

The workscope is said to include the engineering, procurement, construction and installation of at least six slip-over platforms.

In addition, two observation decks are included in the project’s workscope, but are likely to be installed on a separate offshore field, according to sources.

The workscope also includes laying of several kilometres of offshore pipelines, one source added.

As well as McDermott, the LTA players thought to have submitted technical and commercial offers for the Safaniyah upgrade project last year included Dynamic Industries of the US, Italy’s Saipem, a partnership of India’s Larsen & Toubro with Oslo-listed Subsea 7 and Abu Dhabi-based National Petroleum Construction Company (NPCC).

Aramco has carried out several phases of development at Safaniyah in the recent past, with McDermott and Saipem having been associated with most of the development work.

NPCC, meanwhile, is said to have landed work last year on the most recent Safaniyah expansion phase.

That scope covers eight offshore jackets, eight platform decks, several kilometres of subsea pipelines, cables and other associated offshore infrastructure.

With 37 billion barrels of heavy crude in place, Safaniyah is the world's largest offshore oilfield and is located about 200 kilometres north of Dhahran in the Persian Gulf.

McDermott has recently landed three major offshore contracts from Aramco together thought to be valued at about $4.7 billion.

Last month McDermott confirmed the award of a pair of huge deals for Aramco's Marjan incremental offshore project.

The two EPCI contracts are together worth over $4.5 billion.

In addition, McDermott this month revealed another, albeit more modestly sized, deal from Aramco covering an offshore platform and installation and hook-up work at some of the state giant's gas fields.

The workscope of the most recently awarded contract includes a single production deck module to be installed on the Hasbah gas field.

The deal also covers hook-up and modification works on the Karan fields.

McDermott did not give any value, but described the contract as “large", which it uses to denote orders worth between $50 million and $250 million.

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