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Aramco PPP project proposals submitted

1 May 2023

Saudi Aramco has received proposals from bidders for a major desulphurisation programme to modify and upgrade sulphur recovery units (SRUs) at its key gas processing plants in the kingdom.

Two consortiums of contractors submitted proposals by the deadline of 30 April for the scheme, which involves building tail-gas treatment (TGT) facilities at seven gas processing plants.

Aramco expects third-party investments of up to $2bn in the desulphurisation programme, which entails building large downstream TGT units to collect and process tail gas discharged from SRUs at the identified gas plants, MEED reported in December 2021.

The facilities are to be developed either on a build, own and operate (BOO) or build-own-operate-transfer (BOOT) basis. This will make it one of Aramco’s initial public-private partnership (PPP) exercises in its main oil and gas business, if not the first.

Aramco issued expressions of interest (EoI) for the scheme on 18 October 2021 and received EoI documents on 30 November that year. The Saudi energy giant then issued the main tender for the PPP project in May last year, as MEED reported.

Bidders were initially required to submit proposals by 30 September last year. The proposal submission deadline was moved to 15 December and then extended to 15 March this year. The latest bid submission date was set for 31 March.

The two parties that are understood to have submitted bids for the scheme are:

  • Vision Invest (Saudi Arabia) / Larsen & Toubro Energy Hydrocarbon (India)
  • Lamar Holding (Saudi Arabia) / Hyundai Engineering (South Korea) / Korea Overseas Infrastructure & Urban Development Corporation (South Korea) / Enerflex (Canada)

In an interview with MEED earlier this year, Lamar Holding’s chief operating officer Ramit Jain confirmed that the company was bidding for the TGT scheme in a team comprising South Korean government-owned Korean Overseas Infrastructure & Urban Development Corporation and other entities.

SO2 reduction campaign

The Aramco programme is in line with the regulations for emissions to air from stationary sources set out by Saudi Arabia’s Environment, Water & Agriculture Ministry. These stipulate that sulphur dioxide (SO2) emissions from stationary sources must not exceed 250 parts per million volume (dry and 0 per cent oxygen basis). They must also comply with the SO2 ambient emission limits or ground-level SO2 concentration.

The rollout of the desulphurisation scheme stems from Aramco’s goal to achieve net-zero carbon emissions by 2050 and is part of its environmental, social and governance initiatives, sources previously said.

Seven gas plants in Saudi Arabia’s Eastern Province have been identified from which tail gas needs to be treated for up to 99.9 per cent SO2 removal:

  • Berri
  • Haradh
  • Hawiyah
  • Khursaniyah
  • Shedgum
  • Uthmaniyah
  • Wasit

The scope of the scheme has been split into two packages, one source said. The first package covers gas plants in Aramco’s Zone 1 – Berri, Khursaniyah and Wasit – while the second package relates to units in Zone 2 – Haradh, Hawiyah, Shedgum and Uthmaniyah.

Along with fully financing the project, the developer will need to adopt one of the following commercial desulphurisation technologies approved by Aramco for the scheme:

  • TGT reduction absorption
  • Ammonia-based desulphurisation
  • Dry sorbent injection
  • Flue gas desulphurisation using gypsum

According to Aramco, the project will cover “the end-to-end application of the approved technologies, including but not limited to required plot space, utilities, market analysis and logistics of feedstock and byproduct, contractual arrangements, risks associated with each technology related to safety, process reliability and SO2 emissions compliance on a continuous basis”.

Aramco expects the common TGT facility to be operational by 2027.

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Indrajit Sen

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