State-owned Saudi Aramco has signed number of
contracts with international engineering and construction firms to
develop its Khursaniyah oil and gas project and Hawiyah NGL program.
Khursaniyah project will add 500,000 barrels of
crude oil per day to Saudi Arabia's production capacity by the end of
2007. The Hawiyah NGL recovery program will produce an additional
310,000 barrels of ethane and NGL products by 2008, through the
Hawiyah plant and an expansion of the Juaymah gas fractionation plant
near Ras Tanura.
Italy's Snamprogetti was selected for execution of
the Khursaniyah producing facilities, including building a central
gas-oil separation plant and wet crude handling facilities, gas
gathering compression facilities and a cogeneration plant.
A consortium of Bechtel Overseas of London and
Technip was selected to construct two trains of gas conditioning and
ethane and NGL recovery at the Khursaniyah gas plant with a total
capacity of 1 billion standard cubic feet per day.
Saudi Aramco has awarded five contracts to Japan's
JGC Corp. to build the world's largest NGL processing plant and
related facilities at Hawiyah. The project will help recover ethane
and NGL approximately 4 billion standard cubic feet per day of sales
gas. Whereas Snamprogetti will carry out the work related to gas
treating and compression facilities.
Saudi Aramco President and Chief Executive Officer
Abdullah S. Jum'ah congratulated the winning firms and the project
teams, and emphasized that these contracts will help Saudi Aramco
deliver its promise to continue securing energy for the nation and for
the world. "The oil facilities will reinforce the company's
international role in responding reliably to future oil market demand,
while the gas program demonstrates Saudi Aramco's commitment to
continue playing its part in the Kingdom's efforts to further grow and
diversify the economy," Jum'ah said.
Furthermore, contracts for communication, plant
infrastructure facilities and temporary camp and catering services
were signed with local contractors: General Telecom & Engineering
(GTE), Modern Arab Construction (MAC) and National Engineering
Services and Marketing Agency (NESMA).
Under a separate contract, Spain's Tecnicas
Reunidas will expand the Ju'aymah Gas Fractionation Plant as part of
the Hawiyah NGL Recovery Program. The contract calls for construction
of a fourth train to fractionate 270,000 b/d of ethane and NGL and
100,000 b/d of propane and NGL.
OPEC's key advisory committee last week recommended
that the organization may raise its production ceiling by 500,000
barrels per day if prices stay high through April.
"The recommendation... is that OPEC will
continue to monitor the markets and to continue to monitor the price
developments through April. If prices remains at current levels we may
increase the ceiling by 500,000 (bpd) with effect from May 1,"
the official said.
Nigeria's presidential adviser for oil, Edmund
Daukoru had said OPEC's Ministerial Monitoring Subcommittee had
recommended an increase, but would leave it up to the organization's
members, meeting shortly, when to decide on or when it should take
Saudi Arabia, OPEC's top producer, has been pushing
the organization to raise its ceiling from 27 million to 27.5 million
bpd, citing projections of increased crude demand in the second half
The committee comprises representatives from
Nigeria, Iran and Kuwait. Its recommendations are frequently followed
by OPEC member states.
"The price risks are more to the upside than
the downside," said analyst Yasser Elguindi of Medley Global
Advisors." "There is lot more demand for the second half of
the year than OPEC realized at the start of the year. They need to
catch up to that reality."
With group output already close to a 25-year high,
traders are concerned about OPEC's ability to meet rapid demand
growth, led by China, in the second half of the year. "OPEC has
done all it can do. This is out of the control of OPEC," said
Qatar Oil Minister Abdullah Al-Attiyah. "There is not much we can
do, we can make a good will gesture," said Algerian Oil Minister
OPEC experts now are projecting growth of 1.9
million barrels a day on the 84-million-bpd world market, following
last year's burst of 2.6 million bpd. Worried that energy costs could
derail economic growth, US Energy Secretary Sam Bodman contacted a
number of OPEC nations on policy ahead of the meeting, ministers said.
Some in OPEC see no economic damage from even
higher prices, pointing out that the peaks of the 1970s, allowing for
inflation, were equivalent to $80 a barrel in today's money.
"Even at $60 we see no economic impact," said Libyan Energy
Minister Fathi Omar ibn Shatwan.