Top 10 Downstream Contractors

Matthew Reid reveals the region's top 10 downstream EPC contractors

ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors
ANALYSIS, Downstream, Downstream Contractors, Top 10 Downstream Contractors

Matthew Reid reveals the downstream contractors who scooped the most prestigious deals in the region

With the Middle East becoming a hub for refineries and petrochemical expansion projects, contractors who help with the engineering and construction of these facilities are having a field day.

Until recently, contracting work in the downstream sector only referred to refurbishment of ageing refineries or replacement of corroded pipes in an ethane cracker. But times have changed, and how!

The Middle East may just show the world what the modern face of refining will look like. The entire industry agrees that technological innovations are happening in leaps and bounds.

These massive plants are no longer suited for local consumption; the Middle East, today wants to compete with refineries from India and China, in the highly lucrative European market.

With heavier oil as feedstock and the need to produce cleaner fuels, contractors are designing some cutting edge plants. In addition to increasingly expensive plants, the industry is seeing strong collaborations between the state and private sectors, and between the East and the West. The days of smallscale projects is long gone.

As one contractor recently remarked: “When I was young, a billion dollar project was front page news. But with so many downstream diversification plans in the region, everyday we hear of a multi-billion dollar plants coming up.”

RPME takes a look at the contractors who bagged the biggest deals in 2012-13 to give you this year’s Top 10 Downstream Contractors list, enjoy!

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1 Petrofac
The last year has seen Petrofac increase its share in the booming EPC contract market. With an already numerous amount of ongoing projects, Petrofac has continued to add to its large portfolio across the region with major contract acquisitions.

At the end of 2012, Petrofac was awarded EPC packages for the Jazan Refinery and Terminal by Saudi Arabia’s Aramco.

The total EPC was valued at $1.4 billion. Petrofac has also renewed commitments for a number of older projects: building on the work done for Gazprom Neft’s fields in Badra Iraq, Petrofac has been awarded further EPC work for the same field over the following 3 years.

Other major contract wins for Petrofac come in the form of the massive Satah Al-Razboot project (SARB); in particular, an EPC contract for SARB 3 was awarded to Petrofac for $515 million.

Petrofac has also benefitted greatly from its joint venture with Mubadala Petroleum, Petrofac Emirates, with major EPC contracts. One of the major projects to start off 2013 well for Petrofac Emirates was the Upper Zakum UZ750 field.

Valued at total $3.7 billion, in a consortium with Daewoo Shipbuilding & Marine Engineering Co. Ltd., Petrofac was awarded EPC packages for artificial island surface facilities, their share being approximately $2.9 billion.

Petrofac’s dominance has continued through the year with an addition contract awarded in June by Oman Oil Company Exploration and Production LLC (OOCEP).

The $50 million three-year contract will have Petrofac providing operations and maintenance assistance at two new facilities on behalf of OOCEP. Overall, Petrofac’s contract acquisitions over 2013 have far exceeded any other competitor in the market, putting the company at the top of this year’s list.

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2 Samsung Engineering
Continuing its dominance in the region, South Korean firm, Samsung Engineering has been awarded major contracts over the past year to build on their continued workload. June 2012 saw Samsung Engineering awarded its eighth contract by ADNOC in the last 5 years.

The massive ($2.4 billion) EPC and PMC contract for the refinery complexes at Ruwais will see Samsung Engineering oversee the construction of Carbon Black Delayed Coker units for a date of completion at the end of 2015. In the last quarter of 2012, SE was awarded contract work, estimated at $871 million, for the expansion of facilities at Yanbu, Saudi Arabia.

In addition to refinery expansion in Yanbu, Samsung Engineering was also awarded a major EPC contract for the construction of a power plant for the city, estimated at $1.5 billion.

Increasing their presence within Iraq, SE was also awarded an EPC contract by Gazprom Neft for the Badra oil fields valued at $879 million. Facilities to be constructed by Samsung Engineering for the Badra oil fields will include a Gas Separation Plant and related facilities with the aim of being fully operational by 2017, with an operational capacity for up to 170,000 bpd.

Of note in the last year, Samsung Engineering has formed a couple of joint ventures to increase its ability to secure regional contracts: Amec has joined with SE to create the AMEC Samsung Oil and Gas LCC (ASOG), and earlier this year an additional JV with Arabtec was announced to focus on EPC contracts valued at $3 billion or more.

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3 Daelim International
South Korea’s Daelim Industrial said it won an order to repair and install sulphur recovery units for the Kuwait National Petroleum Company. The $517 million project will be an EPC under which Daelim will be responsible for the whole process from engineering to procurement and construction.

The project will take place in the Mina Ahmadi refinery, 35 kilometers south of Kuwait City. The company must engage in the concurrent job of repairing obsolete units while installing new ones in order to expand the recovery capacity up to two million tonnes a year from current 850,000 tonnes within three years of time, said a statement.

Daelim Industrial is currently working on a project to build a plant to produce ethane, propane, and butane in Mina Ahmadi while undertaking another project to install a remote controlling system for gas pipelines in the Port of Shuaiba. The South Korean company is very active throughout Kuwait.

Daelim is also working on the Yanbu refinery complex worth approximately $10 billion. The 400,000 barrels/day refinery has awarded a number of contracts, and has brought on Daelim to build the gasoline and hydrocracker units, Saudi Aramco, Saudi Arabia’s state oil company said in a statement.

Sahara Petrochemicals Company, an affiliate of Tasnee and Sahara Olefins Company and the Saudi Acrylic Acid Company, has also signed a contract with DAELIM for the proposed Butanol plant in Jubail Industrial city.

The design capacity of the Butanol Plant is 330,000 metric tonnes per annum of n-butanol and 11,000n metric tons per annum of iso-butanol. The expected experimental operation start-up will be in the second quarter of 2015 and is expected to last from three to six months.

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4 Technip
Although much of their major contract activity for the last year has been part of their successful JV with NPCC, the French company has landed some major contracts for itself. Being recognized for their engineering expertise throughout downstream processes, Technip has secured a variety of contracts.

Early summer of 2013 saw Technip awarded a substantial contract for a Carbon Black Delayed Coker by Abu Dhabi’s TAKREER. Utilizing a premium coke processing technologies licensed by Technip, the facility is expect to process up to 700,000 tonnes per annum of superior-quality anode green petroleum coke.

Last summer saw Technip secure EPC responsibility for the Halobutyl-2 plant in Jubail Industrial City. Based on their prior FEED work for Iraq’s State Company Oil Projects (SCOP) in 2010, Technip was awarded PMC contracting for the EPC phase of the Karbala Refinery, estimated between $67 to $135 million.

Technip will oversee the primary phase of EPC bidding and contract finalisation followed by the overall completion of EPC contracts for the refinery. Despite their minority share (35%) in the JV with NPCC, the $1.6 billion dollar contract will see Technip oversee the main engineering functions as well as utilisation of their breakthrough floatover technique for installation of facilities at the Umm Lulu field.

Aimed at reducing cost and installation time, Technip’s floatover technique will involve the bulk of construction for the offshore facilities to be done in NPCC’s Abu Dhabi construction yards and then floated to its final destination for installation. This massive joint undertaking is slated for completion in the first half of 2018.

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5 Hyundai Engineering
While many companies have been able to snatch up a bunch of smaller contracts, Hyundai Engineering (HDEC) has come to the fore with a massive contract win. This past April, HDEC announced that it had been awarded the EPC for ADMA-OPCO’s SARB-4. Being the centerpiece of the entire Satah Al Razboot field, the much sought-after onshore facilities of SARB-4 was awarded to HDEC for $1.89 billion.

Involved in this massive contract is the construction of facilities to accommodate oil from 86 wells in the Satah Al Razboot offshore oil field, located 120 km northwest of Abu Dhabi. Related to the SARB contract, Hyundai E&C will also construct a facility at nearby Zirku Island to separate crude and gas collected by the SARB complexes as well as from the Umm Al Lulu oil fields.

Facilities constructed by Hyundai E&C are being designed to handle up to 200,000 bpd and 35 million cubic feet of gas. Slated for completion in April 2017, this massive project will see Hyundai Engineering continue its prominence in the region while it attempts to construct one of the most advanced processing facilities in the entire region.

As Hyundai E&C commences work for SARB-4, the company is continuing its $900 million work at Qatar’s Barzan Gas project, scheduled to be completed next year; in addition, work for the Integrated Gas Development Project (IGD) at Abu Dhabi’s Island has been wrapping up, freeing resources for the $3.2 billion Jeddah Thermal Power Plant to be built in Saudi Arabia.

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6 Fluor
The first quarter of 2013 saw Fluor pick up a massive contract to complement its ongoing list of projects in the region. A contract for FEED work was awarded by Qatar Petroleum and Shell Global Solutions for a proposed petrochemical project located in Ras Laffan Industrial City, Qatar. The exact value of Fluor’s work has not been disclosed, but the overall cost of the entire project is estimated to be near $6.4 billion.

The scope of Fluor’s work has not yet been revealed; however, the facilities are expected to include a mix-feed steam cracker, two train monoethylene glycol units, linear alpha olefins and oxo alcohol units, and required utilities, and infrastructure.

This contract is a continuation of Fluor’s presence in Abu Dhabi’s growing petrochemical industry and is seen as further solidifying its position as a capable FEED and EPC contractor. Earlier this year Fluor successfully completed their FEED work for ADMA-OPCO’s Nasr field which was one of their main projects in the region over the course of 2012.

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7 KBR
Unlike the past years, KBR ended 2012 on a high note with a couple of contracts wins in the region. In November of 2012 KBR garnered a FEED contract for an Integrated Gasification Combined Cycle (IGCC) on the outskirts of Jazan Economic City, Saudi Arabia.

Shortly after winning the IGCC contract, KBR closed out 2012 with an additional contract: focusing on FEED studies in addition to Quality Control Support Services (QCSS), KBR will be providing these services for the Turkish Overseas Company operating in Diyala Province, Iraq.

With gas production expected to first start in 2015, KBR’s work on this field should directly help alleviate Iraq’s increasing power demands by increasing fuel supplies to power plants and feedstock for industrial plants. Building on their year-end momentum in 2012, KBR, in a JV with AYTB, was awarded a substantial multi-year contract at the end of the year.

The contract, valued at $165 million, has KBR providing maintenance services for the Saudi Aramco Total Refining and Petrochemical Company (SATORP) at their new refinery located in Jubail. Aside from regular maintenance of the facilities, KBR will also manage subcontractor activities as well as ensuring the reliability of costs and continued optimum performance.

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8 Jacobs Engineering Group
While Jacobs Engineering has been more quiet in the sector this year than in 2012 and 2011, the company did manage to take a contract from Saudi Aramco Lubricating Oil Refining Co. (Luberef) to provide project management consulting (PMC) services for an expansion project at its lube oil refinery in Yanbu, Saudi Arabia.

Officials did not disclose the contract value, however noted that the overall expansion project cost is estimated at approximately $1 billion. Jacobs’ Leiden, Netherlands office is managing the overall project in collaboration with Jacobs’ offices in Al Khobar, Saudi Arabia and other locations.

Last year, it was awarded a design contract from Saudi Kayan Petrochemical Company, an affiliate of Saudi Basic Industries Corporation (SABIC), to develop a process design package (PDP) and front end engineering design (FEED) package for the build of an ultra-high-molecular-weight polyethylene (UHMWPE) plant in the Industrial City of Jubail.

This plant is to have a production capacity of 35,000 tonnes per year using ethylene sourced from Kayan’s existing olefins plant and is of significant strategic importance as SABIC is to use its own technology.

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9 Foster Wheeler
The Swiss-based company, Foster Wheeler continued to maintain its position as a major contractor in the region. Closing out 2012, Foster Wheeler was awarded a substantial PMC contract for Kuwait’s Mina Al-Ahmadi and Mina Abdullah refineries.

Totalling $500 million, Foster Wheeler’s work will aim at increasing the overall output of the refineries to 800,000 bpd; in addition, the expansion will also include facilities for processing fuel oil into more high-valued products.

While much of FW’s recently awarded contracts have been outside of the Middle East, one of its subsidiaries has been awarded a contract for project consultancy work by Apache Khalda. The contract was announced in April of this year, initial EPC phase of the Qasr Compression Project in Egypt’s Western Desert.

The exact value of contract involving the Qasr gas condensate field has not been disclosed by any party; however, the contract is to encompass consultancy responsibilities while increasing the compression capabilities of existing facilities.

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10 Saipem
While not primarily focused on the Middle East EPC market, Saipem has maintained its presence in the region due to its offshore expertise. Earlier this year, Saipem announced contracts wins for North and West Africa totalling $1.1 billion.

The contract, involving EPC work at the West Delta Deep Marine Phase Ixa Project, builds directly upon recently completed subsea development by Saipem. The company has already exceeded 50% of its financial goals for the year, based primarily on an increasing North and West African contracts.

Despite the shifting focus towards Africa, Saipem has continued its ongoing work within the Middle East, most notably nearing completion of Saudi Arabia’s Al Wasit project. Currently, Saipem’s ongoing work within Saudi Arabia is nearing a total of $2.2 billion, keeping it within this year’s top 10 contractors.

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