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Saudi Aramco to award Midyan Gas Compression Project

Mustang-Hejailan completed FEED on Midyan Project

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolSince MustangHejailan completed the front end engineering and design (FEED) contract for the development of the Midyan offshore gas field, Saudi Aramco evaluated the bids submitted for the engineering, procurement and construction (EPC) contract of the Mustang onshore package of the project.

Located 135 kilometers northwest of the Port of Duba in the Western Province of Saudi Arabia, Midyan is the first large offshore non-associated gas field developed by Saudi Aramco in the Red Sea.

Lying in 1,200 meters of water depth along the Gulf of Aqaba at the border with the Jordan territorial water, Midyan benefits from the uplift of Cretaceous and Tertiary sediments.

Saudi-Aramco-Midyan-Duba-Project-mapDiscovered in 1980s, Saudi Aramco had little interest for non-associated gas fields, even less offshore until the recent years and the decoupling of the gas prices from the crude oil prices.

With most of it power generation and petrochemical industry being fed by crude oil above $100 per barrel, the decoupling of the gas prices motivated Saudi Aramco to review all the potential source of natural gas that could be monetized in substituting crude oil in these applications.

In this context, Saudi Aramco identified Midyan non-associated gas and condensate gas field as one of the best opportunities to be developed in the northwest of the Kingdon of Saudi Arabia (KSA).

Saudi Aramco drilled up to seven delineation and development wells, in shallow and deep water of the Red Sea with a total depth of 5,300 meters.

The last discovery was made lately in 2012, only 26 kilometers away from the Port of Duba, confirming all the potential of the Midyan gas field.

In May 2012, Saudi Aramco had awarded the FEED contract to Mustang from The Wood Group in consortium with the local:

– Faisal Jamel Al-Hejailan Engineering Company (Mustang-Hejailan),

 – Dar Al-Riyadh Engineering Consultants (DAR)

 – Petro-Infrastructure Engineering Consultants Company (PI Consult)

This consortium was created by Mustang in order to meet the requirements of the General Engineering Services Plus (GES+) initiative developed by Saudi Aramco to favor the local content in Saudi Arabia with high added value engineering services activities.

Larsen & Toubro (L&T) leads Midyan EPC competition

From this FEED work, MustangHejailan assisted Saudi Aramco to organize the call for tender of the EPC contract to cover: 

 – Upstream 

 – 135 kilometers gas export pipeline to Duba power plant

 – Gas central processing facility (CPF) to be located in the Duba Industrial City

Saudi Aramco had qualified companies to be invited to bid: 

Saudi-Aramco_Larsen&Toubro_Midyan-Gas-processing-facility – Chiyoda from Japan

 – GS Engineering & Construction from South Korea

 – JGC from Japan

 – Larsen & Toubro (L&T) from India

 – Petrofac from UK

 – Samsung Engineering from South Korea

 – Tecnidas Reunidas from Spain

 – Technip from France

According to the EPC contract to be awarded soon, the central gas processing plant would have a capacity of:

– 75 million cf/d natural gas 

 – 4500 b/d condensates

On this base, the Midyan gas field should be able to supply the Duba power plant to be added to the project, during 20 years.

To leverage the return on capital employed in the project the onshore facilities will be constructed on skids as an offshore project in order to facilitate its transfer to another field when Midyan would have depleted after the 20 years of operations.

All the engineering companies submitted their bids on January 2013.

Since then, Saudi Aramco evaluated the technical and commercial offers.

Although the project was estimated to require $800 million capital expenditure, Larsen & Toubro is leading the competition with an offer below $400 million.

Saudi Aramco is now ready to sign the contract in order to see Midyan gas central processing facility in operations in 2015, while Larsen & Toubro (L&T) is collecting gas facilities projects after winning Oman PDO Saih Rawl phase 2.

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