Saudi Aramco releases gas pipeline tenders

Four packages being offered to contractors with an estimated combined budget of over $1.5bn

Saudi Aramco has released the first tenders for the second phase of its multi-billion dollar Master gas System Expansion (MGSE) initiative.

Aramco has invited contractors to bid on four pipeline packages for the second phase of the MGSE, which plans to increase the footprint of the kingdom’s gas network and provide the resource to the western regions for industrial and power generation use.

The packages are:

Package 1: Western region pipeline

The main scope of works includes the construction of 422 kilometres of 56” pipeline on Aramco’s East West Pipeline 2. Estimated budget is just over $827m.

Package 2: Central region pipeline

Scope includes the construction of 226km of 46” pipeline on the East West Qassim Gas pipeline 1. Estimated budget is almost $364m.

Package 3: Eastern region pipeline

Scope includes the construction of 150km of 56” pipeline on the Shedgum Riyadh Gas Pipeline 3 as well as 40km of 56” pipeline on the Shedgum Riyadh Gas 2. Estimated budget is over $372m.

Package 4: East West Pipeline 1 Upgrade

Scope includes upgrade works on 10 sections of the existing pipeline without resorting to any shutdowns. Total length of upgrade section is 51km.

The contractors that have been prequalified to bid on the projects are a mix of local and international. They include:

- Al-Rashid Trading & Contracting (Local)

- C.A.T Group (Lebanon)

- Consolidated Contractors Company (Athens-based)/Dutco McConnell Dowell (UAE)

- Dodsal Group (UAE)

- HAK Group (Local)

- Saipem(Italy)

- Saudi KAD Construction (Local)

- Tekfen Holding (Turkey)

The first phase of the MGSE is under execution after several awards made by Aramco in 2014. These include pipeline contracts to Saipem and Dodsal as well as a $1.3bn deal to China’s Sepco for the construction of two booster gas compressor stations.

Further work is expected to be tendered in 2015 including another compressor station.

The MGSE is being implemented to meet increased gas demand from the kingdom’s Central Region and Western Province. When the scheme has been completed, it will be able to provide 9.6 billion cubic feet a day (cf/d) of gas using the booster gas compressor stations and pumping stations.

A further three booster compressor stations are due to be added in a second phase.

The Master Gas System is operated by Aramco and is one of the world’s largest hydrocarbons networks. Construction started on the scheme in the mid-1970s as a means to transfer gas across the kingdom to support industrialisation. The system became fully operational in 1982 and allows Aramco to market all of its gas domestically.

Aramco is investing billions of dollars in increasing its gas production for domestic use. This includes associated and non-associated output, as well as non-conventional forms of the resource such as tight gas.