Top 10 MENA Region mega projects
Essential list of the big projects your company should be involved in
Other stories: World's 10 largest oilfield technology companies | World's 10 largest petrochemicals companies | Oil industry giants: ADNOC | Oil industry giants: Saudi Aramco | Top 10 MENA Region mega projects | Top 10 billion dollar oil deals of the summer | 2009's winners and losers in the oil industry | 10 events in oil's history that shook the world | Top 10 Gulf mega projects | Top 10 largest publicly traded oil companies | World's 10 largest oilfield services companies | World's 10 largest oil and gas contractors
After the success of the Top 10 Gulf mega projects we published back in early May ArabianOil&Gas thought we would publish an updated list of 10 brand new projects.
The new list is full of exciting ventures, some of which have been on the drawing board since Leo Sayer, flared trousers and bubble perms were all the rage.
Also, with the new list we have tried hard to include ventures where there is still an opportunity to get involved and maybe even make a successful bid for a contract. We have also spread the area out fro the Gulf to the whole MENA region this time.
The list is rated by value and the information has been sourced from numerous channels including ArabainOilandGas.com, Reuters, MEED, Times Online, Bloomberg and AFP.
- Trans Sahara Pipeline
- Al-Shaheen Refinery
- Nabucco Pipeline
- Yanbu Export Refinery
- Khalifa Point & Fujairah Refineries
- Jubail Export Refinery
- Integrated Gas Development
- Abu Dhabi Crude Oil Pipeline
- Kuwait Oil Co drilling platforms
- Oman oilfield services contract
The Trans Sahara Pipeline (Algeria, Nigeria, Niger)
Client: Sonatrach (Algeria) Nigerian National Petroleum Company (NNPC), Niger
Scope: 4,000 kilometre gas pipeline running from Nigeria to Algeria via Niger.
Status: Agreement signed.
Completion date: 2015
Estimated cost: Varies between $13 billion & $20 billion.
Known contractors: None as yet although interested parties in the venture include Gazprom (Russia), Royal Dutch Shell (Netherlands), Total (France), Eni (Italy)
The Trans Sahara Pipeline must rank as one of the most drawn out projects in oil and gas history. However, deciding to spend many billions of dollars on a pipeline running through Africa is not a decision one takes lightly. Over 30 years is still a long time mind you.
First mooted in the 1970s, the three countries involved in its construction — Algeria, Nigeria and Niger – finally put pen to paper on an agreement last month.
The project will transfer 30 billion cubic metres a year of Nigeria’s vast gas reserves to Algeria, via Niger, where it will join Algeria’s existing network before being pumped into Southern Europe.
The plan is still in its early stages with the three countries behind the pipeline still looking for potential commercial partners in the deal.
Russia’s Gazprom, Total of France, ENI of Italy and Royal Dutch Shell have all expressed an interest in becoming involved in the project.
Gazprom has already committed to building a stretch of pipeline in Nigeria that would become the first sector of the Trans Sahara. The Russian energy giant will spend $2.5 billion on gas projects in the African stare.
The irony of Gazprom’s involvement has not gone unnoticed by industry experts, many of whom believe the principal reason the scheme got off the ground in the first place is because of Europe’s reluctance to become over reliant on Russian gas.
Al-Shaheen Refinery (Qatar)
Client: Qatar Petroleum (QP)
Scope: Plans include a grassroot refinery with a capacity of 250,000-bpd producing diesel oil, gasoline, jet fuel and other hydrocarbon derivatives, including bitumen and green coke.
Status: Delayed - now expected to be tendered in early 2010.
Completion date: Third quarter 2013.
Estimated cost: Was US$13 billion but now expected to be lower.
Known contractors: Pre approved bidders for the project include Bechtel (US), GS Engineering & Construction Corp (South Korea), Hyundai Engineering & Construction Co (South Korea), JGC Corporation (Japan), SK Engineering & Construction (South Korea), Snamprogetti (Italy), Technip (France), Chicago Bridge & Iron Company (The Netherlands), CTCI Corp (Taiwan), Daelim Industrial Co (South Korea), Daewoo Engineering & Construction Co (South Korea), Foster Wheeler Limited (US) and Samsung Engineering Company Limited (South Korea).
The Qatari mega-project has been put on hold for the past few months because the Gulf state can trim a not too shabby 30% off the budget due to the lowering prices of raw materials. When you’re looking at a budget of $13 billion the opportunity to shave almost $4 billion from it if you hang fire for a few months makes perfect sense.
However the delays have led some industry experts to question whether the mammoth undertaking will ever get off the ground. Oil Minister Abdullah bin Hamad Al-Attiyah seems to think so and he has been quoted at numerous conferences etc as saying that the project still has the green light.
The scope of works at Al-Shaheen includes the installation of crude oil pipelines, distillate hydrotreaters, hydrocrackers and fluid catalytic cracking units (FCCU), summarization units, naphtha hydrotreaters and splitters, twin catalytic reformers, vacuum distillation units, and import and export facilities.
The project will refine 50% of the crude/condensate capacity produced from Al Shaheen and is being built to serve current low sulphur specifications by generating about 1000 tpd of by-product sulphur.
All the pre-approved contractors have to do now is wait.
The Nabucco Pipeline
Client: OMV (Austria), MOL (Hungary), Transgaz (Romania), Bulgargaz (Bulgaria), BOTAŞ (Turkey), RWE (Germany)
Scope: The 3,300 kilometres long pipeline will run from Erzurum in Turkey via Bulgaria, Romania, and Hungary to Baumgarten an der March, a major natural gas hub in Austria.
Status: Planning stages -
Completion date: Depending on who you believe either 2010 or 2011
Estimated cost: US$11.25 billion
Known contractors: Penspen (UK)
The Nabucco pipeline sneaks onto the list due Iraqi Kurdistan being proposed as a potential supplier of gas to the huge project.
Nabucco is seen as yet another solution to Europe’s plan of diversifying its gas supply after years of over reliance on Russia.
The 3,300 kilometres long pipeline will run from Erzurum in Turkey via Bulgaria, Romania, and Hungary to Baumgarten an der March, a major natural gas hub in Austria.
Near Erzurum, it will be connected with the Tabriz–Erzurum pipeline and with the South Caucasus Pipeline, connecting Nabucco Pipeline with the planned Trans-Caspian Gas Pipeline.
After completion it is hoped the pipeline will supply between 158 and 459 billon cubic feet of gas to Europe, rising to 1.1 trillion cubic feet by 2020.
The main gas source for the project will be second stage of the Shah Deniz gas field in Azerbaijan that is due to come on stream in 2013. other sources include the aforementioned Iraqi Kurdistan, Turkmenistan and Egypt. A proposal to use Iranian gas was backed by Turkey but blocked after opposition from the European Union and the United States.
Ironically there has even been suggestions that Russian gas could be used via a link up with the Blue Stream pipeline.
Yanbu Export Refinery (Saudi Arabia)
Client: Joint venture between Saudi Aramco and Conoco-Phillips
Scope: A full-conversion refinery is being designed to process Arabian heavy crude supplied by Saudi Aramco. It will produce high-quality, ultra-low sulfur refined products.
Status: Bidding process about to be relaunched.
Completion date: Third quarter of 2014
Estimated cost: Should be about US$10 billion after renegotiating costs
Known contractors: None as yet.
The 400,000 barrels per day (bpd) Yanbu Export Refinery is one of the projects Saudi Aramco have been delaying for the past 12 months after spiraling production costs sent the proposed budget to levels that even the richest company in the world balks at.
However, one of the positives of the global recession is that the cost of raw materials has dropped massively since 2008. This has meant that the joint venture partners are now ready to reactivate the bidding process.
Invitation for bid notices for the early work and major packages have been issued to prequalified local and international contractors. The major packages include a coker unit, crude facility, gasoline unit, hydrocracker, tank farm, offsite pipelines, high voltage electrical packages, as well as other infrastructure packages.
Early work packages are expected to be awarded in November 2009. Bids for the remaining packages are due in the first quarter of 2010 and are expected to be awarded in the second quarter of 2010.
Khalifa Point & Fujairah Refineries (UAE and Pakistan)
Client: International Petroleum Investment Company
Scope: Two integrated refineries with a total capacity of between 400,000-450,000 barrels per day.
Status: Planning stages
Completion date: 2013-2015 depending on start date of construction.
Estimated cost: US$10 billion
Known contractors: None as yet.
Abu Dhabi are one of the three major oil producers – the other two being Saudi Arabia and Algeria – that are both talking the talk and walking the walk in 2009.
Earlier this year it seemed a week never went by without a senior official from the government, ADNOC or IPIC stating that the Emirate intended to spend the billions of dollars of oil revenues it earned during the good times of 2008 on numerous massive infrastructure projects. And that is exactly what it is doing.
IPIC is pushing ahead with its plan to build two $5 billion refineries, one in Fujairah and the other in the UAE and the other at Khalifa Point, at the coastal area of Hub Balochistan in Pakistan.
The Khalifa Point refinery has suffered many delays since the project was announced in late 2007. The reason behind the delays is thought to be the political climate in Pakistan.
US oil company Conoco-Phillips was a partner in the scheme, but pulled out in 2007 as the costs of the project rose. IPIC is now looking for partners to co-own at least one of the proposed facilities.
Jubail Export Refinery (Saudi Arabia)
Client: Saudi Aramco/Total joint venture
Scope: The Satorp refinery will process Arabian Heavy crude and have a capacity of 400,000 barrels per day. It will also produce 700,000 metric tonnes per annum (mtpa) of paraxylene, 140,000 mtpa of benzene and 200,000 mtpa of polymer-grade propylene.
Status: Contracts have been awarded, work underway.
Completion date: 2014
Estimated cost: $9.6 billion
Known contractors: Technip (France), Tecnicas Reunidas (Spain), Daelim Industrial Company (South Korea), Samsung Engineering (South Korea), Chiyoda Corporation (Japan), SK Engineering & Construction (South Korea), CTCI (Taiwan)
The Jubail Export Refinery is a very good example of the ‘bargains’ that are available in the oil and gas industry this year. Everything seems to be cheaper in 2009 and huge oil refineries are no different it seems.
The initial budget for the facility, being developed by a joint venture between Saudi Aramco and the French supermajor and called the Saudi Aramco Total Refining Co (Satorp), was a hefty $12 billion.
However, due to the lower prices of raw materials Satorp managed to trim a not too shabby $2.4 billion off the final budget before it awarded the contracts a few weeks ago.
The facility will produce refined products for the export market, both in the MENA region and further afield.
Technip and Tecnicas Reunidas were the big winners with both companies bagging contracts worth over $1 billion.
Integrated Gas Development (IGD) (UAE)
Client: Abu Dhabi National Oil Company (ADNOC)
Scope: To process 1 billion scfd of offshore gas from the Shaif and Khuff reservoirs to onshore processing facilities at Habshan and Ruwais.
Status: Contracts awarded, work underway.
Completion date: Third quarter 2013
Estimated cost: At least $9.2 billion
Known contractors: Fluor Corporation (US), JGC (Japan), Tecnimont (Italy), Hyundai Engineering & Construction (South Korea), Petrofac (UK), GS Engineering (South Korea), CBI (US), Worley Parsons (US), Fluor Corp (US), Kellogg Brown and Root (US).
Not to be mistaken with the Shah Sour Gas Field Development — ADNOC’s multi-billion joint venture with ConocoPhillips — the IGD project is another massive undertaking by the state-owned hydrocarbons giant.
The IGD project is an essential part of Abu Dhabi’s drive to increase its gas production to meet the soaring domestic demand as the Emirate tries to diversify its industry and move towards gas-intensive petrochemicals production.
ADNOC subsidiaries Abu Dhabi Gas Industries Ltd. (GASCO) and Abu Dhabi Marine Operating Company (ADMA-OPCO) are overseeing the project with GASCO handling the onshore facilities and ADMA_OPCO handling the offshore work.
The IGD Project will be built at a new location in Habshan titled Habshan 5. The site will house four gas processing trains with a combined processing capacity of 2 billion standard cubic feet per day (scfd) of gas.
The scope of works will include the construction of a process plant, utilities and offsites, the Ruwais fourth natural gas liquids (NGL) train and Ruwais storage tanks.
GASCO said in a recent statement that the initial phase of the projects will commence from the respective contractors' home offices before moving to the respective sites at Habshan and Ruwais for construction activities.
Abu Dhabi Crude Oil Pipeline (ADCOP) (UAE)
Client: International Petroleum Investment Company (IPIC)
Scope: The 370km pipeline will transport 1.5 million barrels per day of crude oil from the Habshan oilfields in Abu Dhabi to an oil terminal in the Emirate of Fujairah.
Status: Contracts have been awarded, work underway.
Completion date: Depending on who you believe either 2010 or 2011
Estimated cost: Various reports quote figures between $6 billion and $9 billion.
Known contractors: China Petroleum Engineering & Construction (China), Worley Parsons (US), Belleli Energy (Italy), Converteam Group SAS ( France), Sumitomo Corp.(Japan), Flowserve (US), Salzgitter Mannesmann International (Germany), Jindal Group (India), Penspen (UK), GL (Germany).
The shipping channel in the Straits of Hormuz is only 10 kilometres wide. Through this tiny channel, lying at the entrance to the Arabian/Persian Gulf between Iran to the north and the UAE and Oman to the south, 15% of the world’s oil supply travels every day – some 13 million barrels.
Obviously the channel can become choked with traffic and Abu Dhabi have lone bore the brunt of this – a journey from the Straits of Hormuz to the nearby Abu Dhabi loading docks can take up to 19 hours.
To alleviate the problem IPIC, a sovereign wealth fund of the Abu Dhabi government that specialises in hydrocarbon investment, decided to build a pipeline that bypassed the channel and transported crude oil to the Emirate of Fujairah, situated on the Gulf of Oman.
The immense project is underway with the engineering, procurement and construction duties being assigned to China Petroleum Engineering & Construction (CPEC). The completion date is either 2010 or 2011 depending on whether you believe the project managers working on site (2011) or a spokesman from IPIC (2010). AO&G.com thinks that maybe 2011 is the pony to back.
Kuwait Oil Co drilling platforms (Kuwait)
Client: Kuwait Oil Company (KOC)
Scope: The construction of 27 drilling platforms over 10 years.
Status: Planning stages
Completion date: 2020
Estimated cost: US$7.2 billion
Known contractors: Talks ongoing with potential bidders
Kuwait has been in the news more in 2009 for the multi billion projects it is not going ahead with – K-Dow and Al Zour – rather than the ones it is.
However, it seems that while the Gulf state is hanging fire with downstream projects it is still 100% committed to its upstream sector.
The state-owned KOC announced recently that it plans to spend $7.2 billion on the construction of 27 drilling platforms in an attempt to ramp up oil & gas production in the Gulf state by 1 million barrels per day (bpd).
The 10-year plan will see Kuwait increasing the number of platforms from the current level of 25 up to 60 by 2011 and oil production rise from 3 million bpd to 4 million bpd by 2020.
KOC is currently in talks with potential bidders although a date has yet to be set for proposals.
Oman oilfield services contract (Oman)
Client: Petroleum Development Oman (PDO)
Scope: Maintenance and engineering services on Oman’s oilfields
Status: Currently at bid stage
Completion date: 2017
Estimated cost: US$7 billion
Known contractors: Bidders have until August 12, 2009, to submit a tender.
While not a traditional mega-project in the same vein as a huge pipeline or refinery the contract being offered by PDO made the list because it is still open to tender and the amount of money being offered is so large.
The state-run company is offering four contracts with an annual turnover of $200 million. The contracts cover maintenance and engineering services on Oman’s oilfields and last for seven years with an option for a three-year extension.
PDO is Oman’s largest oil producer and accounts for almost 90% of the country’s crude-oil production. The Oman government has a 60% interest with Royal Dutch Shell owning 34%, French supermajor Total owning 4% and Partex owning 2%.
Due to the response of interested parties the cut-off date has been extended to August 12 2009.