Aramco awards Sinopec $1.4bn gas pipeline contract

Alamy via Reuters

Saudi Aramco has awarded a SAR5.2 billion ($1.38 billion) contract to Chinese state energy major Sinopec to expand its domestic natural gas pipeline.

Sinopec International Petroleum Services Corporation, a wholly-owned subsidiary of Sinopec Oilfield Service Corporation, won the engineering, procurement and construction (EPC) contract for the third phase of Aramco’s master gas system, one of the world’s largest hydrocarbon networks.

Sinopec Oil will implement packages 6 and 7 pipeline projects, undertaking work on the natural gas long-distance pipeline and its ancillary facilities with a total length of 696km.

The work will be completed in 1,275 days.

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The proposed length of the natural gas main pipeline will be 2,630km, while the total length of the sales pipeline is expected to be 1,340km, Sinopec said in a statement.

In February, Saudi Aramco selected contractors for EPC works on 16 of 17 programme packages for a $10 billion expansion of the master gas system.

The project involves upgrading existing gas compression systems, installing new compressors and laying pipelines to extend transportation facilities nationwide. 

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According to Aramco, the pipeline will boost network capacity to 12.5 billion standard cubic feet of gas per day.

The master gas system, built in the mid-1970s, was designed to transport oil-associated gas from the Ghawar field in Al Ahsa governorate in the Eastern Province, aiding the kingdom’s industrialisation efforts.

Aramco has committed to eliminating most gas flaring, reducing CO2 emissions by 100 million metric tons per year.

The kingdom has shifted its focus to non-associated gas production, with a network expansion accommodating gas from the $110 billion Jafurah development.