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Contractors submit prices for Master Gas System package

29 May 2024

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Saudi Aramco has received revised commercial bids from contractors for package 9 of the third expansion phase of the Master Gas System network (MGS-3) in Saudi Arabia.

Contractors submitted revised prices for the package by 26 May, according to sources. The previous bid submission deadlines were 15 April, 6 May and 20 May.

The estimated $10bn MGS-3 project consists of 17 engineering, procurement and construction (EPC) packages. Aramco received technical bids for the 15 pipeline packages of the MGS-3 project, including package 9, during the third and fourth weeks of August. Contractors submitted commercial bids for the pipeline packages during the last two weeks of September, MEED previously reported.

While Aramco has selected contractors for 14 EPC packages of the MGS-3 project, prices submitted by bidders for package 9 are understood to have “exceeded Aramco’s budget”, according to sources.

Sources said this is understood to be the main reason Aramco sought revised commercial proposals for the package, adding that the scope of work on the package has also been modified.

The original scope of work on package 9 involved laying a 56-inch pipeline covering 458 kilometres from booster gas compression station 10 to sector 1 STS-2.

Master Gas System-3 EPC packages

Aramco has divided EPC works on the MGS-3 project into 17 packages. The first two packages involve upgrading existing gas compression systems and installing new gas compressors. The 15 other packages relate to laying gas transport pipelines across various locations in the kingdom.

The following contractors have been selected by Aramco for 15 EPC packages of the MGS-3 project:

  • Package 1 – China Petroleum Engineering & Construction Company (China)
  • Package 2 – Sepco (China)
  • Packages 3 and 12 – Gas Arabian (Saudi Arabia)
  • Package 4 – Mapa (Turkiye)
  • Package 5 – Bin Quraya (Saudi Arabia)
  • Packages 6 and 7 – Sinopec Petroleum Services (China)
  • Package 8 – Larsen & Toubro Energy Hydrocarbon (India)
  • Packages 10 and 14 – Nesma & Partners (Saudi Arabia) / Sicim (Italy)
  • Package 11 – Max Streicher (Germany) / National Basics Company (Saudi Arabia)
  • Packages 13, 15 and 17 – Kalpataru Projects International Limited (India)

Three of the selected contractors – China Petroleum Engineering & Construction Company (CPECC), Sepco Electric Power Construction Corporation (Sepco) and Kalpataru Projects International Limited – said they received official letters of award from Aramco for their packages.

Other successful bidders, including Indian contractor Larsen & Toubro Energy Hydrocarbon and Saudi Arabia-based Gas Arabian Services Company, have confirmed that they have received letters of intent from Aramco for their respective EPC packages, although they are yet to receive formal contracts.

Aramco is due to hold an official contract signing ceremony with contractors it has selected for the various packages of the MGS-3 project on 30 June, MEED recently reported.

Meanwhile, package 16, originally part of the tendering process for the MGS-3 project, has been carved out as a separate tender by Aramco. Contractors are preparing bids for package 16, which are due to be submitted by 30 May.

The original Master Gas System (MGS) was built in the 1970s and commissioned in 1982. Since then, Aramco has been supplying natural gas to its customers across Saudi Arabia via the network, mainly channelling associated gas from Ghawar and other oil fields.

Over the past decade, amid rising gas demand from Saudi Arabia’s industrial and household sectors, Aramco has undertaken projects to increase its non-associated gas production. In 2015, it launched the second expansion phase of the MGS (MGS-2).

Local contractor Arkad Engineering & Construction won the three main pipeline packages of MGS-2, worth an estimated $1.3bn, in early 2016.

EPC works were completed in 2021, increasing the MGS network’s gas handling and transport capacity from 8.4 billion cubic feet a day (cf/d) to 12.5 billion cf/d.

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Indrajit Sen

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