Saudi Aramco likely to proceed with Khurais expansion

Saudi Aramco will likely ask Italy’s Saipem to start work on the company’s $3 billion Khurais oilfield expansion project once detailed engineering is completed, the Middle East Economic Digest (MEED) reported, citing unnamed sources.

Saipem’s contract was said to be valued at $2 billion.

The expansion plan also includes the Mazlij-Abu Jifan pipeline and the Seawater pipeline which will be constructed by Saudi KAD Construction and HAK Group, respectively.

A final decision on the project is expected by the end of June.

In March, MEED reported that the state-owned oil giant put the upstream project on hold in an effort to cut spending amid declining oil prices. The sources said Aramco should proceed on the expansion, if a more cost-effective alternative is agreed upon between the two companies.

Intended to boost production capacity when it came on line in 2009, Khurais was Saudi Aramco’s largest project. It’s located adjacent to the Ghawar oilfield in the Eastern Province and produces 1.2 million barrels per day (bpd) of light Arabian crude, 320 million cubic feet per day of gas, and 80,000 bpd of natural gas liquids.

The world’s largest energy firm is producing record amounts of crude which has exceeded 10 million bpd as the kingdom aims to maintain its market share amid rising output from global producers.