Tecnicas, Petrofac to build SR17.62bn Saudi gas project

Updated 15 September 2015
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Tecnicas, Petrofac to build SR17.62bn Saudi gas project

DUBAI: Spain's Tecnicas Reunidas and Britain's Petrofac have been selected for contracts worth as much as SR17.62 billion ($4.7 billion) to build the Fadhili gas plant in Saudi Arabia for state oil company Saudi Aramco, industry sources said on Tuesday.
"They received notification last week; a letter of intent," said one of the sources.
Petrofac and Tecnicas declined to comment. Saudi Aramco said it does not comment on its business plans.
The new plant is to have a processing capacity of 2.5 billion standard cubic feet per day (scfd) of sour gas from the onshore Khursaniyah and offshore Hasbah fields.
The project is split into three construction packages for the gas processing unit, utilities and offsite facilities such as nitrogen, steam, power and water systems, and sulfur recovery.
Italy's Saipem and South Korea's Daelim Industrial had previously been said to be among the bidders, sources told Reuters in July.
Tecnicas bid for two of the packages on its own, and for the third in conjunction with South Korea's GS Engineering and Construction, according to a second industry source.
Ultimately, the Spanish firm won the two packages in which it bid solo: For the gas processing unit for as much as $2 billion and for utilities and offsites, worth as much as $1 billion, according to the first industry source and a separate source.
Three sources confirmed that Petrofac won the package for sulphur recovery worth as much as $1.7 billion.
Aramco said in its 2014 annual review published in May that the Fadhili gas plant was on track to come onstream by 2019.
Fadhili, together with Aramcoís other gas projects in Wasit and Midyan, are slated to add more than 5 billion scfd of non-associated gas processing capacity, which will help the company meet soaring domestic demand for industrial use and electricity generation in the world's largest oil exporter.
Gas production remains a top priority for Saudi Arabia as it wants to limit direct crude oil burning for electricity, thereby preserving its ability to increase oil exports.


Brent eases from 2019 highs as markets await US-China trade talks outcome

Updated 19 February 2019
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Brent eases from 2019 highs as markets await US-China trade talks outcome

  • The slight downward correction was driven by concerns about the health of the global economy this year
  • Bank of America Merrill Lynch expects Brent prices to average between $50 and $70 per barrel

SINGAPORE: Brent crude oil prices eased away from 2019 highs on Tuesday on caution that economic growth may dent fuel demand this year, although supply cuts led by OPEC still meant markets were relatively tight.
International Brent crude oil futures were at $66.08 per barrel at 0220 GMT, down 42 cents, or 0.6 percent from their last close, but still not far off the 2019 high of $66.83 a barrel hit in the previous session.
US West Texas Intermediate (WTI) crude futures were at $55.71 per barrel. While that was up 12 cents from their last settlement, it was below the $56.33 2019 high from the previous day.
Traders said the slight downward correction was driven by concerns about the health of the global economy this year.
Bank of America Merrill Lynch said in a note that the Sino-American trade dispute was hurting economic growth globally.
“Addressing global trade tensions is key for improving the economic outlook,” it said in a note.
China’s vice premier and chief trade negotiator, Liu He, and US Trade Representative Robert Lighthizer lead a round of trade talks this week in Washington.
Considering the economic outlook and supply and demand balances, the bank said it expects Brent prices to average between $50 and $70 per barrel, “anchored around $60.”
Despite some caution around trade, global oil markets remain relatively tight because of supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), with top crude exporter Saudi Arabia cutting the most.
Saudi seaborne crude exports fell in the first half of February, with departures standing at 6.204 million barrels per day (bpd), a 1.341 million bpd decline on the previous month and 0.91 million bpd decline on the year, data intelligence firm Kpler said.
Further providing oil markets with support are US sanctions against petroleum exporters Iran and Venezuela.
Venezuela is a major crude supplier to US refineries while Iran is a key exporter to major demand centers in Asia, especially China and India.