Oil giant Saudi Aramco announced today, Nov. 18, a new contracting strategy for its oil and gas brownfield and plant upgrade projects.
The strategy focused on establishing new businesses and developing partnerships based on sustainability and new technologies via Aramco's projects by awarding long-term contracts to experienced contractors to improve cost efficiency and the quality and safety of the projects.
Following Aramco’s approval of the new contracting strategy, and after a thorough evaluation process, eight companies have been selected to carry out the work.
It includes the consortium of Nasser Saeed Al-Hajri And Contracting and Samsung EPC Co. Ltd., Daelim Saudi Arabia Co. Ltd., 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., branch of Technip Italy S.P.A., and branch of Hyundai Engineering and Construction Co. Ltd.
“These LTAs which are associated with huge business which 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,” Ahmad A. Al Sa'adi, Aramco’s Technical Services Senior Vice President, said.
The scope of the LTAs includes engineering, procurement, construction, start-up and pre-commissioning of each project, as well as the installation of the upgraded facilities in the designated operating areas.
The contracts are established for a period of six years with an option to exercise another six years extension.
“The LTAs will enable us to continue developing home-grown talent in Saudi Arabia through achievable employment targets. It will also contribute to our IKTVA target to increase local content,” Al Sa’adi added.
The contracts are developed with a special emphasis on improving Saudization, local content and supply chains through Aramco’s In-Kingdom Total Value Add (IKTVA) program, helping Aramco to meet its IKTVA targets.
The contracts mandate a minimum commitment to use 39% local content and supply chains initially, increasing to a 60% commitment within six years.
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