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Sulfur may cost $600 million extra in Wasit Gas Project

Saipem submitted $600 million change order to Saudi Aramco

The Wasit Gas Development Program represents $4.6 billion capital expenditure to build an onshore grass-roots Central Processing Facility (CPF) to process 2.5 billion cf/d of gas from the Arabiyah & Hasbah offshore fields and produce approximately 1.75 billion cf/d of sales gas.

Offshore gas wellhead production and tie-in platforms along with associated pipelines and cables will be installed to provide the feed gas to the CPF.

The program also provides for installing Natural Gas Liquid (NGL) fractionation facilities inside the Wasit CPF to allow for processing a 240,000 bpd C2+ NGL stream produced at Khursaniyah.

Saipem awarded of the $2.1 billion offshore package

The bidding process for Wasit Gas onshore facilities has been finalized with the selection of

 – SK Engineering & Construction for Lump Sum Turn Key (LSTK) contracts to perform the engineering, procurement and construction (EPC) work for the inlet and gas  facilities, natural gas liquids (NGL) fractionation and the sulfur recovery units (SRU) and utilities facilities

 – Samsung Engineering Ltd for a LSTK contract to perform the EPC of the co-generation and steam generation facilities.

 – Saipem for the $2.1 billion LSTK contract to execute the EPC contract of the offhsore package with a completion due on 2014.

This offshore package awarded to Saipem includes:

 – 13 unmanned production platforms with full hydrogen sulphide (H²S) safety equipment

 – Central distribution facilities for the both gas fields Arabiyah and Hasbah

 – Connection to Wasit onshore processing facilities through 150 km pipeline

The high density sulfur Arabiyah & Hasbah challenge

The challenge came up in this offshore package with the density of the sulfur contained in the non-associated gas which appears to be much higher than expected by comparison with the other gas fields in the same area.

With its actual density, the sulfur is freezing at high temperature (115°C) causing multiple blockages in the pipelines and preventing any transportation to the shore

Transporting offshore the gas at high temperature to prevent the sulfur to freeze is not an easy task.

All the experienced solutions by Saudi Aramco and Saipem to reduce the sulfur density and make it easier to transport through the pipeline have failed so far.

The consequence of these difficulties are to :

 – Likely delay the completion of this offshore package from 2014 to 2015

 – Study a redesign of these offshore facilities to treat the gas and make the sulfur transportable with an extra capital expenditure of $600 million according to Saipem estimation.

 – Ask support to offshore pipeline specialists like BP and Shell to investigate alternative solutions for example to inject chemicals in the gas to reduce the sulfur density.

Whatever shall be the preferred solution by Saudi Aramco, it may costs 30% more capital expenditure than the original awarded EPC contract for this offshore package.

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1 Comment to “Sulfur may cost $600 million extra in Wasit Gas Project”

  1. Can you tell me when the offshore works i.e. platforms installation for Al Wasit were originally scheduled to take place?

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