January 25, 2011 / 2:04 PM / 9 years ago

UPDATE 1-S.Korean firms win Saudi Wasit gas deal

* SK Engineering and Construction, Samsung to build Wasit

* Wasit gas plant to help meet rising domestic demand

* No value given for the contracts

(Updates with deal details, background)

RIYADH, Jan 25 (Reuters) - State oil giant Saudi Aramco [SDABO.UL] has awarded deals to South Korean firms to build the kingdom’s largest gas plant, Wasit, it said on Tuesday.

Gas projects have taken priority in the world’s top oil exporter to meet rising domestic demand for petrochemicals and power and help Saudi Arabia avoid burning oil it would rather sell internationally.

South Korea’s SK Engineering and Construction [SKEC.UL] won three engineering, procurement and construction (EPC) deals. which involve the work for the inlet and gas facilities; sulphur recovery units (SRU) and utilities; and natural gas liquids (NGL) fractionation plants

Samsung Engineering (028050.KS) has also won an EPC contract which involved building four 150 megawatt (MW) cogeneration units.

Industry sources told Reuters on Jan. 16 that SK and Samsung were leading the race for the first contracts while another South Korean company Daelim im Industrial (000210.KS) was also in the running for the co-generation package. [ID:nLDE70F04M]

Aramco did not give a value for the deals or the cost of the project. Industry sources have said the project would cost $6-$8 billion.

Wasit, part of the state oil firm’s push to raise gas feedstock supplies is designed to process 2.5 billion cubic feet per day (cfd) of gas from the offshore non-associated sour gas fields Arabiyah and Hasbah when completed in 2014.

It would also produce around 1.75 billion cfd of sales gas.

FAST-TRACK

Under the inlet and gas facilities package, SK will build four gas-treating trains. It will also build 4 SRUs and NGL facilities, Aramco said, without specifying the capacity of the plants.

NGL facilities call for the processing of 240,000 bpd of ethane and NGL stream produced at Khursaniyah, Aramco said earlier, in a description of the project on its web site.

Wasit is one of the fast-tracked gas plants Aramco plans to build. The other one is Shaybah Natural Gas Liquids (NGL) whose bids are now under evaluation.

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For a table on companies that bid for Wasit, please click on [ID:nLDE69Q0R5] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Most of the kingdom’s gas output is associated with oil, so when Saudi Arabia curbs crude output with OPEC it loses some gas volumes.

Aramco’s gas reserves, the world’s fifth largest, stood at 275.2 trillion cubic feet in 2009, of which 50 percent was not associated with oil output.[ID:nLDE65E1EV]

Together with two other plants, Khursaniyah and Karan, the Wasit plant would help Saudi Arabia process its targeted production increase of raw gas to 15.5 billion cubic feet per day (cfd) by 2015 from 10.2 billion cfd. [ID:nLDE63P1QZ]

Canada’s SNC-Lavalin (SNC.TO) has carried out front-end engineering and design of the plant.

Reporting by Reem Shamseddine; editing by Humeyra Pamuk

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