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Aramco awards package two deal for Marjan

Consortium of two contractors understood to have won significant Saudi offshore deal

Saudi Aramco has awarded a significant offshore contract to a consortium of two players for the second offshore package involving its Marjan incremental development project.

Indian engineering giant Larsen & Toubro (L&T) and Oslo-listed Subsea 7 are understood to have won the contract.

Multiple industry sources told Upstream that Aramco recently placed a letter of intent (LoI) to the L&T-led group and a final contract is expected to be inked later this week.

L&T and Italy’s Saipem were locked in a two-horse race, with Aramco finally choosing the Indian player as its preferred contractor for Marjan Package 2, which is understood to be valued at about $1 billion.

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Under the contract, Package 2 includes oil facilities for the incremental development project, a three tie-in platforms, nine wellhead oil platforms, 200 kilometres of subsea pipelines across 21 segments and 150 kilometres of subsea cables across 15 segments.

A total of six bidders were thought to have submitted bids for the second offshore Marjan package.

In addition to the L&T-led consortium, those thought to have bid included Malaysia’s Sapura Energy, China’s COOEC, McDermott of the US, Abu Dhabi's National Petroleum Construction Company (NPCC) and a grouping of Saipem with South Korean giant Hyundai Heavy Industries.

The Saudi Arabian state oil company has also selected its preferred contractors for the two other Marjan Packages (1 & 4) that are understood to be together worth more than $4 billion.

A consortium of US giant McDermott International and China’s Offshore Oil Engineering Company (COOEC) is believed to have landed Package 1, while McDermott on its own is understood to have been selected for Package 4.

The first offshore package, Package 1, includes work on an offshore gas-oil separation platform complex, a contract likely to be valued upwards of $3 billion.

The GOSP facility is thought to be the single largest engineering, procurement and construction offshore contract offered by the state-owned giant in recent years and is likely to involve about 100,000 tonnes of fabrication.

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The new GOSP complex is being designed to handle 475,000 barrels per day of oil, 813,000 bpd of liquids and almost 750 million cubic feet per day of gas.

The facilities are likely to include a new accommodation platform, a tie-in platform, a gas compression platform, one production platform, an auxiliary platform, a flare platform, several kilometres of subsea pipelines and cables.

Package 4, for which McDermott has been selected, comprises a gas cap production network that includes a tie-in platform and two gas cap production wellhead platforms and is expected to be worth upwards of $1 billion.

The Marjan field lies in the Persian Gulf, about 85 kilometres northeast of the Tanajib onshore plant.

The three offshore packages awarded by Aramco are understood to be together worth upwards of $5 billion.

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