ARAMCO LOOKS TO LTAS TO BUILD LOCAL TALENT AND SUPPLY CHAIN

Saudi Aramco has awarded in November eight long-term agreements (LTAs) to develop its oil and gas brownfield projects and plant upgrades.

After a robust bidding process, Aramco selected eight companies, which included a consortium of Nasser Saeed Al-Hajri And Contracting/Samsung EPC Co. Ltd., Daelim Saudi Arabia Co., Engineering for The Petroleum and Process Industries (Enppi) Branch, GS Construction Arabia Co. Ltd, Snamprogetti Engineering and Contracting Co. Ltd. (Saipem), JGC Gulf Engineering Co. Ltd, unit of Technip Italy S.P.A. and of South Korea’s Hyundai Engineering and Construction Co. Ltd.

Each agreement, which runs for a period of six years and extendable by another six years, will contribute to the development of the country’s workforce.

“The strategy focuses on establishing new businesses and developing partnerships based on sustainability and new technologies via Aramco's giant projects by awarding long-term contracts to reputable and experienced contractors to improve cost efficiency and the quality and safety of the projects,” Aramco noted.

The agreements will encompass engineering, procurement, construction, start-up and pre-commissioning work on each project, as well as the installation of the upgraded facilities.

The contracts must comply with improving the Saudisation agenda, and stipulate that the local content and supply chain will make up at least 39% of the total, which will be ramped up to 60% commitment within six years. The move will enable Aramco to meet its In-Kingdom Total Value Add (IKTVA) targets.

“These LTAs, which are associated with huge business, allow us to boost the performance of our brownfield and upgrade projects through new technologies and pioneering environmental sustainability fundamentals, while improving contract procurement and construction phases,” said Ahmad Al Sa'adi, Aramco’s technical services senior vice president.

“In addition, it will enable us to continue developing homegrown talent in Saudi Arabia through achievable employment targets. This is very important to us, as well as contribute to our IKTVA target to increase local content.”

Separately, Aramco teamed up with American giant Baker Hughes in December to establish Decel, a non-metallics company. The partnership builds on a memorandum of understanding signed in July 2019 by the two companies to create the venture.

The 50-50 joint venture combines Aramco’s pre-eminence as an energy giant and Baker Hughes’ world-class energy technology expertise to develop and commercialise a broad range of non-metallic products for multiple applications in the energy sector.

“Decel’s new facility is being developed at King Salman Energy Park (SPARK), in Saudi Arabia’s Eastern Province. SPARK is a 50-square-kilometer energy city megaproject, which will position Saudi Arabia as a global energy, industrial and technology hub. Initially, the facility will produce onshore non-metallic pipelines – including reinforced thermoplastic pipes (RTP) – from composite materials,” Aramco said.

Non-metallic products are being used across the manufacturing sector, including in oil and gas, automotives, building and construction, packaging and renewables. The products have lower carbon emissions, are lighter than their conventional counterparts, and are resistant to corrosion.