meed-logo

line1 line2 line3
SIGN IN / REGISTER

Aramco focuses on upstream capacity building

12 September 2023

This package on Saudi Arabia’s upstream sector also includes: 

> Aramco sets new deadlines for Manifa offshore bids
> Aramco gives gas plant expansion bidders more time
> Riyadh and Moscow extend oil output cuts till year-end
> Aramco receives bids for Safaniya field expansion
> Aramco selects contractors for $10bn gas project
> Development of Dorra field may stoke tensions

 

While Saudi Arabia is set to continue reducing its oil production until the end of the year, a measure that could lead to further declines in its oil revenues, the decision has not deterred state energy giant Saudi Aramco from investing in projects to build its oil and gas production potential.

On Tuesday 5 September, global benchmark Brent crude breached the $90-a-barrel mark for the first time this year, primarily due to the Opec+ alliance’s oil supply management mechanism and the kingdom’s voluntary output cuts.

Aramco is capitalising on this high oil price environment to push through projects that are critical to achieving its strategic upstream goals of raising oil production capacity to 13 million barrels a day (b/d) by 2027, from about 12 million b/d at present, and doubling gas production by the end of this decade.

The state enterprise expects its capital expenditure this year to be $45bn-$55bn, including external investments – at least 20 per cent higher than its $37.6bn capex in 2022.

Spending on offshore oil and gas engineering, procurement, construction and installation (EPCI) projects is expected to account for the bulk of this projected capex for 2023.

Robust offshore spending

Most of the kingdom’s oil and gas production comes from its offshore hydrocarbons resources in fields including Abu Safah, Arabiyah, Hasbah, Berri, Karan, Manifa, Marjan, Ribyan, Safaniya and Zuluf.

Aramco aims to maintain and gradually increase productivity at these fields, some of which are mature. In line with this, the state enterprise is poised to award approximately $4bn of offshore EPCI deals to entities in its long-term agreement (LTA) pool of offshore contractors by the end of this year.

So far this year, Aramco has already awarded about $3bn-worth of contracts as part of this projected spending.

A consortium of Indian contractor Larsen & Toubro Energy Hydrocarbon (LTEH) and UK-based Subsea7 has won seven offshore EPCI contracts from Saudi Aramco, estimated to be worth close to $2bn.

LTEH/Subsea7 won contract release and purchase order (CRPO) numbers 98, 120 and 121, which cover EPCI work on Saudi Arabia’s Zuluf, Hasbah and Manifa offshore oil and gas fields. The combined value of the three CRPOs, awarded to the consortium in March, is estimated to be $1bn.

In April, LTEH/Subsea7 won CRPOs 117, 118 and 119, which cover EPCI work on Saudi Arabia’s Marjan offshore oil and gas field development. The three tenders are thought to be worth over $900m.

The LTEH/Subsea7 consortium is also understood to have secured the contract for CRPO 97, which relates to the EPCI of various units at the Abu Safah field.

Italian contractor Saipem confirmed in early April that it had won CRPO 96, estimated to have a value of $120m. The scope of work on the tender covers the EPCI of one platform topside and the associated subsea flexible, umbilical and cable systems at the Abu Safah and Safaniya fields.

Also in April, China Offshore Oil Engineering Company (COOEC) won the CRPO 122 contract, estimated to be worth $255m, covering the installation of 13 jackets at the Safaniya field.

Saipem has also won CRPO 124, a key contract for the third gas development phase of the Marjan hydrocarbons field.

In early September, contractors in Aramco’s LTA pool of offshore service providers submitted bids for 10 EPCI packages of the Safaniya increment programme, estimated to be worth upwards of $5bn in total.

Increasing gas production

To grow its gas production potential, Aramco is tapping into the vast resources of the Jafurah unconventional gas reserve in Saudi Arabia’s Eastern Province. The Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East, spread over an area measuring 17,000 square kilometres and holding an estimated 200 trillion cubic feet of gas.

Aramco awarded $10bn-worth of subsurface and engineering, procurement and construction (EPC) contracts in November 2021, marking the start of the development of the Jafurah unconventional gas field, said to be the largest non-associated gas resource base in Saudi Arabia.

As part of the next development phase, Aramco plans to build a facility with the potential to process up to 2 billion cubic feet a day (cf/d) of raw gas produced from the Jafurah field. The Jafurah second expansion phase will also include EPC of large gas compression facilities and key units for natural gas liquids (NGL) fractionation.

MEED recently reported that Aramco is close to officially awarding contracts for the five main EPC packages of the Jafurah second expansion phase, estimated to be worth $10bn combined.

Carbon capture scheme

Meanwhile, Aramco is endeavouring to make its core operations more environmentally friendly to meet its target of attaining net-zero carbon emissions by 2050 and in line with Saudi Arabia’s net-zero emissions by 2060 target.

To that end, Aramco has undertaken a project to develop a carbon capture and storage infrastructure in Saudi Arabia that will tap carbon dioxide (CO2) discharge from its gas processing plants.

The accelerated carbon capture and sequestration (ACCS) scheme aims to capture CO2 from Aramco’s northern gas plants of Wasit, Fadhili and Khursaniyah, as well as from the operations of its subsidiary Saudi Basic Industries Corporation (Sabic) and Saudi industrial gases provider Air Products Qudra.

Aramco is expected to reach a financial investment decision on the ACCS project by the end of the year. The two planned phases of the project are estimated to require a total capital expenditure of between $1.5bn and $2bn.

The ACCS project’s initial phase is expected to have a capacity of about 9 million tonnes a year, with the collection pipeline system designed to support its future expansion.

Aramco has brought on board US oil field services provider SLB (formerly Schlumberger) and Germany-headquartered Linde, the world’s largest industrial gas producer, as partners for the project’s initial phase. The second-phase partners are US-headquartered Air Products and oil field services provider Baker Hughes.

EPC works on the first phase of the ACCS project are expected to take three years, with commercial operation scheduled for 2027.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11133645/main.gif
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • UAE monitors desalination plants after oil spill

    3 November 2026

    State utility Etihad Water & Electricity (EtihadWE) says it is monitoring seawater quality at desalination plant intake points following an oil spill off the UAE's northern coast.

    In a statement, the utility said it is continuing to "implement proactive measures to safeguard the water production system" following the spread of an oil slick towards coastal areas in the emirates of Umm Al-Quwain, Ras Al-Khaimah, Ajman and Sharjah.

    The spill involved the tanker Gem No. 2, which was struck by a projectile in UAE territorial waters on 9 October. The resulting oil pollution has raised concerns over potential contamination of seawater used by desalination plants along the northern coast.

    EtihadWE said its measures include continuous monitoring of seawater quality at plant intake points, regular testing of produced and distributed water, and verification of compliance with approved standards before water enters the distribution network.

    The utility added that the precautionary measures will not affect the continuity of water supplies to consumers in the Northern Emirates.

    In an earlier update on 30 October, the Climate Change & Environment Ministry said the oil slick was concentrated off the coast of Umm Al-Quwain, extending partially towards coastal areas in Ras Al-Khaimah, Ajman and Sharjah.

    The ministry said the concentration of pollution had declined significantly and that the leak had been stopped at source. However, surveying, monitoring and clean-up operations are continuing in affected coastal areas.

    The Energy & Infrastructure Ministry said specialised technical teams are continuing work to address technical issues with the tanker, including repairing damaged sections, restoring operational systems and assessing the integrity of its structure.

    The proximity of the oil slick to the Naqa'a desalination plant in Umm Al-Quwain has drawn particular attention. According to media reports, the slick approached to within approximately 2 kilometres of the facility.

    Naqa'a has a production capacity of 150 million imperial gallons a day, equivalent to approximately 682,000 cubic metres a day. The plant supplies water to the Northern Emirates and has been operational since 2022.

    It is owned by Naqa'a Desalination Plant, a special-purpose vehicle established by Mubadala, Acwa and the former Federal Electricity & Water Authority, now known as EtihadWE.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21104534/main3427.jpg
    Mark Dowdall
  • Oman signs 1GW battery storage agreement

    3 November 2026

    Oman's Nama Holding, a subsidiary of Oman Investment Authority (OIA), has signed a framework agreement with China's State Grid International Development to develop battery energy storage systems (bess) with a targeted capacity of 1GW.

    The agreement covers two battery storage systems, each with a capacity of 500MW, at Duqm Industrial Station and Al-Subaikhi (Ibri Solar 3) Station.

    It is understood that both systems will operate at 400kV and connect to Oman's national electricity transmission grid.

    The deal is part of a package of economic and investment agreements signed by OIA with Chinese institutions and companies during the Oman-China conference on 2 November. OIA put the combined value of the bess projects at approximately RO384.5m ($1bn).

    The agreement comes as Oman advances plans to expand its renewable energy capacity and strengthen the electricity transmission network.

    Nama Power & Water Procurement Company is also procuring a separate 950MW standalone bess programme comprising five facilities in the sultanate, as MEED exclusively reported.

    The wider package of agreements, signed during Sultan Haitham Bin Tariq's state visit to China, covers sectors including renewable energy, mining, logistics, digital transformation and space technology.

    In the wind energy sector, Oman's O-Green and Shanghai Electric Wind Power signed a strategic partnership to establish a joint research and development centre and wind turbine testing facility at the Mawarid turbine factory in Duqm.

    The partnership will focus on adapting turbine technologies to Gulf climate conditions, supporting local manufacturing and developing green ammonia projects in Oman.

    The partnership is valued at RO3.85m-RO7.69m ($10m-$20m). It also identifies potential future contracts exceeding $1bn, alongside green ammonia projects and initial investment commitments in Oman exceeding $200m.

    In solar, OIA signed a preliminary term sheet with Chinese firms PCG Power and Hoymiles for a partnership valued at RO38.45m ($100m).

    The partnership aims to develop solar energy projects in Oman and establish a solar inverter manufacturing facility serving markets in the Middle East and North Africa.

    It is also intended to support the localisation of solar-related industries, expand domestic production and develop export markets.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21102638/main.jpg
    Mark Dowdall
  • Consultants bid for Roshn’s north Riyadh scheme

    3 November 2026

     

    Saudi gigaproject developer Roshn Group has received proposals from lead design consultants for its planned flagship development in north Riyadh.

    Consultants submitted proposals on 1 November for detailed design, tender documentation and construction documents for the project’s first plot.

    The planned development covers 13.7 square kilometres and will be a residential-led mixed-use scheme containing retail, office, hospitality, education and civic facilities.

    The consultancy scope for plot one includes infrastructure, utilities, public-realm works and the site adaptation of Roshn’s residential prototypes. It has been divided into two work packages.

    The first package covers phases A, B and E, which cover about 7.8 million square metres (sq m) and will include 17,000 units.

    The second package covers phases C and D, covering about 4.7 million sq m and with more than 15,000 units.

    The site is bordered by the Expo 2030 site, King Abdulaziz Park, the Sports Innovation Lab Zone and National Housing Company’s Khozam development.

    Transport connectivity is a key element of the masterplan. Two metro stations are planned, including a station at the interchange between the existing Line 4 and planned Line 7, and a dedicated Line 7 station. The development could also be served by the planned Qiddiya high-speed rail link and a potential diversion of King Salman Road.

    The scheme will add to Roshn’s existing development pipeline in Riyadh, which includes the multi-phase Sedra community. The developer is expanding its focus from single-family housing to larger mixed-use districts under its Roshn 3.0 strategy.

    Last month, Roshn signed a preliminary agreement with TMG Saudi, the local subsidiary of Egypt’s Talaat Moustafa Group, to establish a joint venture to explore a separate mixed-use project in Riyadh.

    TMG Saudi will hold a 51% stake in the proposed joint venture and Roshn will hold the remaining 49%. The companies said they will undertake detailed masterplanning and prepare a business case for the project, which preliminary studies indicate could include more than 55,000 residential units.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21101503/main.jpg
    Yasir Iqbal
  • Adnoc awards contract for Ruwais Diyab unconventional gas

    3 November 2026

     

    Abu Dhabi National Oil Company (Adnoc) has taken the final investment decision (FID) for the Ruwais Diyab unconventional gas development in Abu Dhabi.

    The project will deliver 345 million standard cubic feet a day (scf/d) of raw gas from 2029 over a 25-year period, with the potential to reach up to 1 billion scf/d in the future.

    Gas will be processed on site and connected to the UAE’s gas network through new pipeline infrastructure, “strengthening domestic supply, supporting the nation’s economic and industrial growth as well as Adnoc’s liquefied natural gas export ambitions”, the Abu Dhabi energy giant said when announcing FID on the project at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) 2026.

    According to sources, Adnoc has awarded the design, build and operate (DBO) contract for the Ruwais Diyab unconventional gas development to China-based Jereh Group.

    A formal kick-off meeting between Adnoc and Jereh is expected to take place later in November, sources told MEED.

    The DBO contract awarded by Adnoc to Jereh is understood to cover the second phase of the Ruwais Diyab unconventional gas development. The tendering exercise for the project started last year.

    “The development [of Ruwais Diyab] follows a disciplined programme of technical studies, field testing and subsurface analysis, delivered by Adnoc Onshore under a DBO model, to reduce development risk,” Adnoc said in its statement on 2 November.

    “It brings together advanced subsurface expertise, artificial intelligence-enabled drilling and completion technologies and integrated project delivery capabilities to support the efficient and responsible development of domestic gas resources,” it added.

    The UAE holds the seventh-largest gas reserves in the world, with 298 trillion standard cubic feet (scf) of conventional gas reserves and 160 trillion scf of unconventional gas resources.

    Adnoc holds the majority 60% stake in the Ruwais Diyab concession, the majority of which is situated onshore, while France’s TotalEnergies holds the other 40% interest.

    The agreement to explore, appraise and develop the area’s unconventional gas resources was signed by Adnoc and TotalEnergies in November 2018. The partners announced first gas output at the concession, presumably on a pilot basis, two years later.

    Adnoc has set a target of producing 1 billion scf/d of gas from the Ruwais Diyab concession by 2030, in line with its target to achieve self-sufficiency in overall gas production by the end of this decade.

    “Ruwais Diyab’s additional unconventional gas supply will strengthen Adnoc’s gas value chain, including Adnoc Gas’s ability to meet rising domestic and international customer demand,” Adnoc said in its 2 November statement.

    “Ruwais Diyab advances Adnoc’s ambition to establish a scalable unconventional gas business and create a platform for future growth,” the company added.

    Ruwais Diyab first phase

    Adnoc awarded the contract for engineering, procurement and construction (EPC) on the first phase of the unconventional gas development programme to local contractor Astra Engineering & Construction in early 2025, according to regional project tracker MEED Projects.

    The first phase aims to achieve a gas output level of 100 million scf/d. The main structures to be built in the first phase include a central processing facility, two well pads, interconnecting well fluid pipelines, gas export pipelines and tie-in stations.

    The EPC contractor will be required to provide services such as surveying, design, engineering, procurement, expediting, transportation, fabrication, construction, testing, installation, pre-commissioning, commissioning, site performance testing, operation and maintenance of all units.

    The duration of the EPC works is understood to be 20 months, with the contractor also responsible for operating and maintaining the phase one facilities for 15 years.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21100974/main4351.png
    Indrajit Sen
  • Sultan Al-Jaber appeals for global energy security reset

    2 November 2026

    The global energy industry must fundamentally rethink how it builds, protects and delivers secure energy, following a year of unprecedented disruption that has exposed critical vulnerabilities in international supply chains, Sultan Ahmed Al-Jaber, the UAE’s Industry & Advanced Technology Minister and managing director and group CEO of Abu Dhabi National Oil Company (Adnoc Group) has said.

    Delivering the opening address at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) 2026 on 2 November, Al-Jaber said preparedness is essential to navigating an increasingly uncertain global landscape.

    “For decades, energy security was a question for specialists. It was debated in rooms like this, by people like us, in a language that few needed to learn. This year, every family, every farmer, every industry and every business owner is asking about it, and our collective job is to find the answers.”

    Noting that it is not possible to control every situation and remove every risk, Al-Jaber said: “The choices we make today will determine the energy landscape a decade from now. Let’s apply the lessons we have learnt. Let’s build capacity and everything that supports it. Let’s forge partnerships that hold when it matters. And if you want a partner you can count on, you are in the right room, in the right city, in the right country. Because when it counts the most, you can count on the UAE.”

    Setting out the case for a more resilient energy system, Al-Jaber said that since the disruption in the Strait of Hormuz, nearly 1 billion barrels of crude have been drained from inventories. He noted that in some markets, stocks of diesel are at their lowest seasonal level in 35 years, while others are facing a supply gap for liquefied natural gas (LNG) of 600 billion cubic feet. “Simply put, the world has eroded its supply buffers,” Al-Jaber said.

    “But supply is only half the story. The other half is delivery. Before the disruption, logistics were less than 5% of the cost of a barrel. Today, they are more than 30%. In short, energy security is not only measured at the point of production. It is now also measured at the point of delivery.”

    Mitigation steps

    Al-Jaber outlined five steps the energy industry can take to reduce the impact of future shocks. “First, accessible supply. We need expanded strategic storage, larger stockpiles of products and flexible refining capacity closer to consumer markets.

    “Second, routes to market. Supply only counts when it arrives. Infrastructure must be built before it is needed and enabled by advanced logistics.

    “Third, operational intelligence. Moving from automated operations to intelligent energy systems that anticipate risk, optimise performance and drive down the cost of every barrel.

    “Fourth, capital follows confidence. Policy must create it, finance must accelerate it and insurance must keep trade moving.

    “Fifth, which is in my view the most important, is people. Because behind every barrel that arrives is a person who made sure it did. Systems don’t carry responsibility, people do.”

    Photo credit: Adipec via LinkedIn

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21091189/main2954.jpeg
    Indrajit Sen