meed-logo

line1 line2 line3
SIGN IN / REGISTER

Aramco negotiates with gas plants PPP bidders

18 July 2023

Register for MEED's guest programme 

Saudi Aramco is negotiating with two consortiums of bidders competing for one of the first public-private partnership (PPP) deals in its main oil and gas business.

The project involves modifying and upgrading sulphur recovery units (SRUs) at Aramco's gas processing plants located in the kingdom's Eastern Province.

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

  • 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) / Brookfield (Canada) / Export-Import Bank of China (China)

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

Under the desulphurisation programme, Aramco expects third-party investors to build large downstream TGT units to collect and process tail gas discharged from SRUs at seven identified gas plants, MEED reported in December 2021.

Based on Aramco's initial evaluation of proposals, the consortium led by Lamar Holding pulled ahead in the race to win the contract to become the sole developer of the desulphurisation facilities, sources told MEED.

The Lamar-led consortium has submitted “considerably lower prices” than the other group being headed by Vision Invest, for both Zone I and II gas plants, according to sources.

“Lamar is the lowest bidder for both packages [Zones I and II], but Aramco is still in negotiations with the other consortium,” one source said.

“It remains to be seen whether one consortium wins both packages or Aramco chooses to divide them between the two groups,” another source said.

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, then to 15 March this year, and again extended it to 31 March. Bids were eventually submitted on 30 April.

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11010795/main3124.jpg
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Alec set to launch IPO on Dubai Financial Market

    15 September 2025

    UAE-based Alec Holdings has announced that it will list 20% of its share capital on the Dubai Financial Market through an initial public offering (IPO).

    According to an official statement, the firm will offer 1 billion shares, representing 20% of its share capital. The subscription will be offered in three tranches and will open on 23 September and close on 30 September.

    The first tranche comprises individual subscribers, the second includes professional investors, and the third tranche is reserved for eligible employees of Alec and the Investment Corporation of Dubai (ICD).

    ICD, the investment arm of the Government of Dubai, is currently the sole shareholder of Alec. It will retain 80% of Alec’s issued share capital following the offering.

    Emirates NBD Capital and JP Morgan Securities have been appointed as joint global coordinators. Both firms, along with Abu Dhabi Commercial Bank and EFG Hermes, have been appointed as joint bookrunners.

    Moelis & Company is the independent financial adviser.

    Emirates NBD has been appointed as the lead receiving bank.

    Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al-Maryah Community Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank, Mashreq Bank and Wio Bank have also been appointed as receiving banks.

    “Alec intends to distribute a cash dividend of AED200m, payable in April 2026, and a cash dividend of AED500m for the financial year ending 31 December 2026, payable in October 2026 and April 2027,” the statement added.

    “The company further intends to distribute cash dividends in April and October of each year, with a minimum payout ratio of 50% of the net profit generated for the relevant financial period, subject to the approval of the board of directors and the availability of distributable reserves,” Alec said.

    Alec Holdings’ core businesses include Alec Construction and Target Engineering.

    Other businesses include Alec Fitout, Alemco, Alec Data Centre Solutions, Alec Technologies, Alec Lite, Alec Facades, Linq Modular, Alec Energy and AJI Rentals.

    READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

    Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667572/main.jpg
    Yasir Iqbal
  • Kuwait sets October deadline for residential PPP bids

    15 September 2025

     

    Kuwait’s Public Authority for Housing Welfare (PAHW) has invited local and international firms to submit their statements of qualifications (SoQs) by 30 October for a tender covering the development of three residential cities under a public-private partnership (PPP) framework.

    The projects will be developed on a design, finance, build, operate, maintain, sell and transfer basis. The contract term is 30 years, with four years allocated for construction.

    The projects include:

    • Al-Mutlaa City (2.12 million square metres)
    • East Saad Al-Abdullah City (1.02 million sq m)
    • West Saad Al-Abdullah and the commercial services strip in Jaber Al-Ahmad City (1.01 million sq m)

    Interested companies can collect the request for qualification (RFQ) documents between 18 September and 1 October.

    To qualify, firms must have at least 10 years of experience in delivering large-scale residential or mixed-use developments.

    These projects will be the first to be implemented under Kuwait’s new real estate development law, introduced in 2023. The law opens Kuwait's housing sector to private investment and enables the establishment of joint ventures between local and foreign investors to deliver new developments on a PPP basis.

    Kuwait construction market overview

    Kuwait’s construction and infrastructure projects market continued its recovery in the first half of 2025, with over $1.8bn-worth of contracts awarded by 8 August.

    The outlook for the remainder of the year appears promising, following the government’s approval of capital spending worth KD1.7bn ($5.7bn) in May for more than 90 projects.

    According to local media, these projects include rail, road, water and electricity infrastructure, as well as the Grand Mubarak Port.

    The country invested over $45bn in construction and transport projects during 2015 and 2016, amid high oil prices. However, parliamentary gridlock and declining oil revenues since then led to a slowdown in contract awards.

    The sector has seen particularly low award levels since 2019, when the total fell below $2bn for the first time. Awards increased modestly in 2020 and 2021, but then dropped again to a low of $1.4bn in 2022.

    In contrast, 2023 marked a significant recovery, with awards reaching $3.6bn.

    According to data from regional tracker MEED Projects, 2024 was the best year in recent times, with contract awards totalling approximately $5.6bn for construction and infrastructure schemes.

    READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

    Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667516/main.jpg
    Yasir Iqbal
  • Lowest bidders emerge for Oman Sinaw-Duqm road

    15 September 2025

     

    Oman’s Ministry of Transport, Communications and Information Technology has opened bids for two contracts covering the upgrade of sections three and four of the Sinaw-Mahout-Duqm road.

    According to results published by the Oman Tender Board, local firm Galfar Engineering & Contracting submitted the lowest bid of RO51m ($215.6m) for section three of the project.

    The other bidders are:

    • Strabag ($206m)
    • Sarooj Construction ($244.3m)
    • Rimal Global Group ($285.6m)
    • Oman Gulf Company (undisclosed)

    The third section spans 83 kilometres (km) and extends from the Al-Jouba roundabout in the Wilayat of Mahout towards Duqm. It consists of a single carriageway with two lanes, each lane measuring 3.75 metres in width. 

    For the fourth section, the Austrian firm Strabag submitted the lowest bid of RO79m ($206m).

    The other bidders for this section include:

    • Galfar Engineering & Contracting ($215.6m)
    • Sarooj Construction ($244.3m)
    • Rimal Global Group ($285.6m)
    • Oman Gulf Company (undisclosed)

    This section of the project spans about 49km, stretching from Sarab to the boundaries of the Special Economic Zone at Duqm near Nafun.

    This project will serve as a key piece of infrastructure linking North Al-Sharqiyah to the Special Economic Zone at Duqm.

    UK analytics firm GlobalData expects the Omani construction industry to register an annual average growth rate of 4.2% from 2025 to 2028, supported by investments as part of the Oman Vision 2040 strategy. Under this strategy, the government plans to allocate RO20bn ($52bn) to the tourism sector and aims to attract 11 million visitors annually by 2040. 

    The infrastructure construction sector was estimated to grow by 6.1% in 2024 and is projected to record an annual average growth rate of 5.4% from 2025 to 2028. Growth will be driven by Muscat’s efforts to upgrade the road, railway and airport infrastructure to improve connectivity across the sultanate.

    READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

    Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667488/main.gif
    Yasir Iqbal
  • Aramco turns attention to strategic projects

    12 September 2025

     

    In the second quarter of 2025, Saudi Aramco’s capital expenditure (capex) stood at $12.3bn, marking a marginal year-on-year increase of 1.46%. For the first half of the year, the company recorded capex of $24.85bn, up 9.5% compared to the same period last year.

    The company had earlier issued capital investment guidance of $52bn to $58bn for 2025, excluding approximately $4bn in project financing.

    Concerns grew in Saudi Arabia’s offshore oil and gas projects market earlier this year as engineering, procurement, construction and installation (EPCI) contract awards stalled.

    Aramco spent a record $5bn on offshore EPCI contracts in 2024 and was expected to surpass that in 2025. However, it awarded no Contract Release Purchase Orders (CRPOs) in the first half of the year, fuelling apprehension among contractors and suppliers.

    In July, Aramco dispelled speculation by awarding five tenders worth over $3bn. The CRPOs are numbers 150, 157, 158, 159 and 160, and involve EPCI work and infrastructure upgrades at the Abu Safah, Berri, Manifa, Marjan and Zuluf offshore oil fields.

    Aramco also awarded four additional CRPOs as part of a large-scale infrastructure expansion at the Zuluf offshore field. These are CRPOs 145, 146, 147 and 148, with a combined estimated value of nearly $6bn.

    With these contract awards, Aramco has nearly doubled its offshore capex this year compared to 2024, marking another year of robust upstream investment.

    Looking ahead, Aramco is evaluating bids received for seven key tenders in July and August.

    These tenders include CRPOs 154, 155 and 156, representing the next phase of infrastructure expansion at the Safaniya offshore oil field; CRPO 161, which covers the EPCI of four gas jackets at the Arabiyah, Hasbah and Karan fields; and CRPOs 162, 163 and 164, relating to the EPCI of key infrastructure at the Abu Safah, Berri, Karan, Marjan and Safaniya fields.

    Onshore projects advance

    In parallel with the Safaniya offshore expansion, Aramco is tendering a separate project to build onshore surface and processing facilities to handle additional volumes of oil and associated gas generated by the expanded offshore infrastructure.

    The scope of the Safaniya onshore facilities project has been divided into two main EPC packages: the first covering water treatment and injection units, and the second focused on produced water utilities. Contractors have been given deadlines of 24 October and 7 November to submit technical and commercial bids.

    Aramco is also understood to be close to awarding the main EPC contracts for the expansion of the Haradh gas-oil separation plant 3 (Gosp 3) in Saudi Arabia. Located within the Haradh hydrocarbons development in the Eastern Province, the project will increase output of the Arab Light crude grade from 300,000 barrels a day (b/d) to 420,000 b/d. It will also raise sour gas production to 32 million cubic feet a day (cf/d).

    Ramping up gas production

    In line with its goal of increasing gas production, Aramco is progressing its Jafurah unconventional gas programme. Situated in Saudi Arabia’s Eastern Province, the Jafurah Basin contains the largest liquid-rich shale gas play in the Middle East, with an estimated 200 trillion cubic feet of gas in place. The shale play spans approximately 17,000 square kilometres.

    The Jafurah programme is a cornerstone of Aramco’s long-term gas strategy, with total lifecycle investment expected to exceed $100bn. In February 2020, Aramco received a capex allocation of $110bn from the Saudi government to support the long-term phased development of the unconventional gas resource base.

    Aramco is estimated to have spent $25bn across the first three phases of Jafurah’s development. In November 2021, the company awarded $10bn in subsurface and EPC contracts for phase one of the programme.

    On 30 June 2024, Aramco awarded 16 contracts worth approximately $12.4bn for phase two. The scope includes the construction of gas compression facilities, associated pipelines and the expansion of the Jafurah gas plant – covering gas processing trains, utilities, sulphur handling and export infrastructure.

    In July 2024, a consortium of Spain’s Tecnicas Reunidas and China’s Sinopec was awarded a $2.24bn EPC contract by Aramco for phase three of the expansion.

    Phase four of the Jafurah expansion is estimated at $2.5bn. The scope includes EPC works for three gas compression plants, each with a capacity of 200 million cf/d. Bids were submitted in mid-January, remain valid through September, and are under evaluation, with a contract award expected in Q4 2025.

    Aramco is also tendering a major project to boost gas compression capacity at the Shedgum and Uthmaniya plants in the Eastern Province.

    The facilities currently receive approximately 870 million cf/d and 1.2 billion cf/d of Khuff raw gas, respectively. The project aims to increase compression and processing capacity and to construct new pipelines to enhance gas transport.

    Contractors are preparing bids for several EPC packages under the Shedgum and Uthmaniya gas compression project.

    MEED’s October 2025 special report on Saudi Arabia also includes:

    > ECONOMY: Riyadh looks to adjust investment approach
    > BANKING: New funding sources solve Saudi liquidity challenge
    > GAS: Saudi Arabia and Kuwait accelerate Dorra gas field development
    > POWER: Saudi Arabia accelerates power transformation
    > CONSTRUCTION: Saudi construction pivots from gigaprojects to events
    > TRANSPORT: Infrastructure takes centre stage in Saudi strategy

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14656451/main.png
    Indrajit Sen
  • GCCIA signs $500m deal for Oman power link

    12 September 2025

    The GCC Interconnection Authority (GCCIA) has signed a $500m interim financing agreement with Sohar International Bank to support the planned direct electricity interconnection between Oman and the GCC grid.

    The project will involve building a 400-kilovolt double-circuit transmission line linking the Al-Sila station in the UAE with a new Ibri station in Oman. The line will span 530km.

    The Al-Sila station, located in Abu Dhabi near the border with Saudi Arabia, is owned and operated by GCCIA. It is a key node in the existing Gulf power grid, enabling the transfer of electricity between the UAE, Saudi Arabia and other GCC states.

    The Ibri station will be newly developed by GCCIA as part of the interconnection project. Situated in Oman’s Al-Dhahirah governorate, the facility will act as the entry point for linking Oman’s national grid to the wider GCC network. Oman is currently connected via the UAE grid.

    The link will provide a transmission capacity of 1,700MW and a net transfer capacity of 1,200MW.

    In February, MEED reported that the interconnection project would require around $700m of investment.

    It had previously been estimated that the project could cost around $1bn.

    The Qatar Fund for Development (QFFD) signed an agreement with the GCCIA in the same month to finance part of the electricity transmission network that will form Oman’s second link with the GCCIA network.

    Local media reports suggested that QFFD would provide around $100m for the project.

    Although a contract has yet to be awarded, it is understood that Bahwan Engineering Company is among the firms that have submitted bids for the project.

    In June, Abu Dhabi Fund for Development (ADFD) signed a financing agreement with the GCCIA to support a $205m project linking the Al-Sila substation to Saudi Arabia’s Salwa substation.

    This involves the construction of a 400kV double-circuit overhead transmission line extending 96km and includes the expansion of three key substations in Gonan, Al-Sila and Salwa.

    Oman’s first link with the GCCIA became operational in November 2011.

    It comprises a 200kV line connecting the Mahadha grid station in Al-Wasit, Oman, to the Al-Oha grid station in Al-Ain, UAE.

    Projects are also under way for interconnection with Kuwait, as well as with Iraq, as part of a major investment.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14656220/main.jpg
    Mark Dowdall