Saudi Aramco awards two Marjan EPCI contracts worth up to $1bn to McDermott

McDermott noted the combined value of the contracts is between $550mn to $1bn

Saudi Aramco has made a strong push to redevelop some of its ageing oilfields
Saudi Aramco has made a strong push to redevelop some of its ageing oilfields

McDermott announced that it won two engineering, procurement, construction and installation (EPCI) contracts from Saudi Aramco for its offshore Marjan field.

The first contract, which McDermott values between $500mn and $750mn, includes the design, procurement, fabrication, and installation, testing and pre-commissioning of the TP-10 tie-in platform, six gas lift topside modules and associated pipeline and subsea cables. The total weight of the structures will exceed 29,000 short tons (27,000 metric tons) and pipelines totaling over 40 miles (65 kilometers).

"This award demonstrates the strong market appeal of our value-driven and highly integrated offering of products and services," said Linh Austin, McDermott's senior vice president, Middle East and North Africa. "McDermott has extensive practical operational experience in the region which gives assurance to our customers of our ability to deliver projects safely, on time and to budget."

Fabrication work will be undertaken from McDermott's Jebel Ali yard in Dubai and its Dammam yard in Saudi Arabia. Engineering work will take place in its Dubai and Al Khobar offices. McDermott noted in a press release that this is part of its efforts to localise operations.

The second, smaller EPCI contract, which is worth between $50mn and $250mn, involves EPCI work to upgrade two existing platforms related to the installation of associated equipment for electrical submersible pumps (ESPs) and space for a future high integrity pressure protection system (HIPPS), subsea composite cable lay and topside cable tie-ins.

Work to fulfill this contract will take place in McDermott's facilities in Saudi Arabia. The company noted that work on both contracts would begin immediately, and the contract awards would be reflected in its Q1 2019 backlog.

The company recently released its financial results, noting an "order intake of approximately $5.5bn early in the first quarter of 2019." In the full year 2018, McDermott reported a net loss of $2.7bn, which is says is "due primarily to the factors that impacted fourth quarter results."

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