LNG

Saipem, the leading liquefied natural gas and energy project engineering company, has signed a new contract with the Saudi Arabian Oil Company (Aramco) for the Jafurah Gas Development in the Arab kingdom.

The Saudi project also involves the construction of about 835 kilometres (519 miles) of pipelines.

“The project involves the construction of a hydrocarbon collection system and the transport of gas and condensate to the new Jafurah plant, in the Eastern Province of Saudi Arabia,” said Milan-based Saipem.

The Italian company will also build a system to transport water associated with the separation of the treated gas.

The engineering, procurement and construction contract includes the supply of materials and commissioning of the pipelines for the transportation of gas, condensate and production water.

“The award of this new project from Aramco consolidates a long-standing relationship and Saipem's strategic positioning in the Middle East,” said Francesco Caio, Saipem's Chief Executive.

“The agreement confirms the trust and appreciation of our customers in the project management capacity and in the cutting-edge engineering and technological services that Saipem is able to offer,” stated Caio.

Saipem was recently awarded two new offshore contracts for transportation and installation activities for a total amount of more than $600M relating to Australian LNG and Turkish pipeline natural gas projects.

LNG awards

Saipem was chosen by Chevron Corp. in Australia for the Jansz-lo Compression Project, designing and developing the infrastructure and the gas field located around 200 kilometres offshore the northwest coast of Australia, at water depths of around 1,400 metres.

The Jansz-lo field is part of the Chevron-operated Gorgon LNG Project, which is supplied with feed gas from a group of different offshore fields and is one of the world’s largest LNG plants located on Barrow Island.

Additionally, Saipem is working on the offshore portion of the North Field production project in the Arab Gulf underpinning the Qatar’s LNG expansion.

It has also been contracted along with Technip Energies and Russian firm NIPIGas, a subsidiary of the Gazprom Neft Group, to help develop the Arctic LNG II project for Yamal LNG operator, Russia’s Novatek.

Egypt plans to construct a $7.5-billion petrochemicals, energy and bunkering complex at Ain Sokhna in the Gulf of Suex where it previously imported LNG during the era of natural gas shortages before the Zohr gas field and other discoveries were made in the Eastern Mediterranean and the Nile Basin.

The Egyptian government said the facility would be constructed on a 3.65 million square metres site and is the latest instalment in the country’s comeback story as an LNG exporter and now with plans to build its East Med energy hub.

The deal to develop the complex is between the Red Sea National Refining and Petrochemicals Company and the Suez Canal Economic Zone's development company. They aim to produce value-added petroleum products to fill Egypt's domestic needs and enable exports.

“The products include polyethylene, polypropylene, polyester, bunkering fuel and other petroleum and chemical products,” said a statement.

Egypt’s gas crisis during the “Arab Spring” social upheavals in North Africa and the Middle East in 2014 led to the diversion of natural gas supplies away from LNG production to meet growing domestic demand and to avoid power cuts.

The Gulf of Suez is a main transit point for global shipping and the development of bunkering will be part of the business.

Before the bringing on stream of the Zohr field in the East Med in 2017, Egypt had been forced to import LNG from 2015 in two floating storage and regasification units deployed at Ain Sokhna.

The Egyptians halted LNG imports two years ago and have now started regular exports of LNG from their two liquefaction facilities at Idku and Damietta, east of the port of Alexandria.

The Idku LNG export plant has been on stream again since 2017 under the operatorship of Royal Dutch Shell, which acquired original operator BG Group.

The Damietta facility only re-started operations and exports in February 2021.

With Damietta back on stream, Egypt added 4.5 million tonnes per annum of LNG output to its export volumes now totalling 12.5 MTPA.

The move forward for Damietta came after the resolution of  a long-standing dispute between the shareholders over contracts because of the closure.

Naturgy Energy, the Spain-based European utility, agreed to sell its stake in the Damietta plant and to rescind its Egyptian gas contracts on departing from the Unión Fenosa Gas (UFG) joint venture.

Naturgy’s UFG partners, Italian Eni company and the Egyptian Natural Gas Holding Company (Egas), reached the agreement under which Naturgy received a series of payments adding up to US$600 million.

Eni has taken over the contract for the purchase of natural gas for the LNG plant and receives corresponding liquefaction rights.