Milan-based engineering firm Saipem has been awarded a significant contract exceeding $1 billion for the construction of a gas compression plant in Saudi Arabia. This project, associated with Saudi Aramco’s Uthmaniyah non-associated gas field, marks a pivotal investment in the region’s energy sector.
Details of the Contract
The contract was confirmed on June 10 and represents the first project under Aramco’s national EPC champion program. This initiative aims to enhance local contractor capabilities by partnering them with international firms to undertake large-scale energy projects, increasing domestic content and workforce participation.
Joint Venture Formed
The contract was signed between Saipem and Nasser Saeed Al-Hajri Contracting Co., a joint venture created to facilitate this endeavor. The project is expected to be completed within 42 months.
Project Objectives
The primary goal of the new gas compression facility is to extend the productive life of the Uthmaniyah gas field. Furthermore, it aims to address the rising energy demand in Saudi Arabia.
Technical Specifications
- The facility will compress non-associated gas directed to the existing Uthmaniyah gas plant.
- Gas pressure will be elevated from approximately 150 psig to 1,000 psig.
- Daily gas delivery is expected to reach about 882 million cubic feet (cu ft).
- Modifications to the existing gas plant will also be included in the project scope.
Strategic Importance
This contract aligns with Aramco’s strategy to enhance its gas production and processing capabilities. The company aims to boost sales gas production by up to 80% by 2030 compared to 2021 levels. Enhancing domestic gas supply is crucial for power generation, industrial uses, and petrochemical production.
Associated Infrastructure Developments
The Uthmaniyah project is part of a larger initiative to augment gas compression and processing capacity at both the Uthmaniyah and Shedgum facilities. Currently, these facilities receive approximately:
- 1.2 billion cu ft per day at Uthmaniyah
- 870 million cu ft per day at Shedgum
Historical Context
Commissioned in 1981, the Uthmaniyah Gas Plant is a cornerstone of Aramco’s gas processing network, located approximately 177 km southwest of Dhahran. It plays a vital role in supplying gas to the domestic market.
Future Developments
As Saipem moves forward, the company also plans to integrate with Subsea 7, a merger anticipated to finalize in the latter half of 2026. This integration is valued at around $4.6 billion, promising to elevate their collective capabilities in the industry.
With around 45,000 employees globally and a substantial backlog of projects worth $45.2 billion, the combined entity is positioned for significant growth in the energy sector.
