< Previous20 TOP 25 EPC CONTRACTORS oilandgasmiddleeast.comSeptember 2023 8 9 10 Wood Hyundai Engineering and Construction Company British multinational engineering and consulting business Wood marked a year of strategic growth in the Middle East following a suite of contract awards across its Consulting, Projects, and Operations businesses. The contracts awarded, worth around $590 million, saw Wood’s teams in the Middle East work together with a range of partners and clients to unlock conventional and low-carbon energy supply, optimise energy production and processing, and extend onshore and offshore asset life across Bahrain, Iraq, Saudi Arabia, Kuwait, Qatar, and the UAE. Key contract awards secured in the last 12 months include a long-term multi-million- Spanish contractor Técnicas Reunidas has moved up several spots on our EPC contractors list this year thanks to its steady stream of contracts. After several years of delays of Final Investment Decisions from clients, the contractor saw accelerated bidding activity leading to some major new awards during the first few months of 2023. In August 2023, the company’s JV with NPCC secured a $3.6 billion contract for South Korean contractor Hyundai Engineering & Construction Co (HDEC) is back on our list this year after securing several contracts and hitting key milestones. The firm was awarded contracts for two EPC packages related to a petrochemical expansion at the SATORP refinery in Jubail, Saudi Arabia. This contract marks the largest order a domestic company has ever won in Saudi Arabia for plant construction and is part of the Amiral project, a future, world-scale petrochemical complex co-developed and operated by Aramco and France’s dollar contract in Qatar, several PMC projects in Abu Dhabi, as well as an extension for Front End Engineering, Detailed Engineering, and Procurement and EPC contract management solutions for a long-term client in Iraq. Wood continues to grow and expand its ADNOC’s gas processing infrastructure. The scope of work includes commissioning of new gas processing facilities that will TotalEnergies. HDEC is currently executing 13 projects worth $4.87 billion in Saudi Arabia, including Marjan Oil Field Development Program, Jafurah, and a number of transmission lines and substation projects. Earlier this year, the contractor also started construction work on the Shaheen Project, which marks Aramco’s biggest- ever investment in South Korea. Hyundai E&C is the project lead for the Shaheen Project, which aims to build the largest petrochemical facility in the history of the South Korean downstream industry. footprint in the Middle East by investing in the development of its national workforce. In Iraq, Wood plans to recruit more than 200 new employees to support contract wins. Also, Wood said it will continue to support low-carbon and hydrogen projects in the Middle East. optimise supply to the Ruwais Industrial Complex in Abu Dhabi’s western Al Dhafra region. In May 2022, a JV between Técnicas Reunidas and Wison Engineering landed a sizeable contract from QatarEnergy for the North Field Expansion Project. Scope of work includes sulphur handling, storage, and loading facilities within Qatar’s Ras Laffan Industrial City. The company is actively working on major projects in the Middle East including Oman’s Duqm refinery, Aramco’s Marjan field, and GT5 natural gas project in Kuwait. Técnicas Reunidas21 TOP 25 EPC CONTRACTORS oilandgasmiddleeast.comSeptember 2023 13 11 12 China Petroleum Engineering and Construction Corporation Maire Tecnimont Sinopec Engineering Maire Tecnimont is back on our list after securing major contracts in the Middle East region, maintaining the group’s backlog at consistently high levels. Significant contracts awarded during the past two years include three EPC contracts worth $3.5 billion from Abu Dhabi’s Borouge for the fourth expansion phase of the Ruwais polyolefins complex, west of Abu Dhabi. In December 2022, the Italian contractor landed a $1.3 billion EPC Lump Sum contract by a QatarEnergy-Chevron Phillips Chemical JV for the $6 billion integrated polymers complex in Ras Laffan Industrial City in Doha. China-headquartered Sinopec Engineering made a breakthrough in the international market by exceeding its annual contract target of $1 billion in 2022, the company stated in its annual report. Sinopec Engineering entered the Algerian market for the first time, continued to consolidate the Middle East market, and successfully ventured into providing technology and engineering services to the Central Asian China Petroleum Engineering and Construction Corp (CPECC), a subsidiary of the China National Petroleum Corp, is an engineering and construction company that builds refineries, pipelines, and other oil and gas-related infrastructure. The company is on our list this year as it continues to secure new awards and execute key projects in the Middle East including UAE, Kuwait, Iraq, and Iran. In June 2023, CPECC won a major contract from ADNOC Onshore, the onshore unit of ADNOC, to upscale production of its mature fields. CPECC said the award covers The project’s scope of work entails complete engineering services, equipment and material supply, erection, and construction activities up to mechanical completion, which are expected market. Last year, the company signed two EPC contracts with Algerian National Oil Co totaling $497 million. Sinopec Engineering also signed a series of engineering service engineering, procurement, construction, and management of what is called Project Swing, involving retooling the existing facilities at the giant Bab field, Northeast Bab field and Southeast field — as well as adding facilities for water and gas injection Another significant award was secured by the CPECC consortium with Saipem and NPCC worth $60 million, for the early project activities such as initial detailed engineering and procurement of critical long lead items of ADNOC’s Hail and Ghasha gas development project. CPECC is also constructing Iraq Basrah’s natural gas liquids plant, which is set to liquefy 200 Mcf of associated gas daily in its initial phase, with an expected rise to 400 Mcf per day by the end of 2023. to be complete by 2026. In 2022, Maire Tecnimont’s main subsidiary Tecnimont was also awarded an EPC contract for Sonatrach’s LPG extraction plant. contracts with Saudi Aramco and SABIC and made breakthroughs in new countries and new fields across Iraq, UAE, and Qatar. In June 2023, Sinopec Engineering Saudi Co. Ltd secured a major EPC award for Tank Farm and SATORP integration from Aramco and TotalEnergies for the $11 billion Amiral complex currently being developed at the SATORP refinery in Saudi Arabia. “In the overseas market, the Sinopec Engineering’s project execution has fully resumed normal and the overseas business maintained continuous, stable and healthy operation”, the company said in its annual report.22 TOP 25 EPC CONTRACTORS oilandgasmiddleeast.comSeptember 2023 16 14 15 China Offshore Oil Engineering Company Kent Consolidated Contractors Company Dubai-headquartered Kent continues to support its regional clients with a range of engineering and project delivery services. In Q3 2022, Kent was awarded a major front-end engineering and design (FEED) and engineering, procurement, and construction management (EPCM) contract by ADNOC for the BAB Far North Full Field Development Project. The project supports ADNOC’s ambitions to sustainably increase oil production to meet energy demands. The company has also been awarded several Project Management Consultancy (PMC) projects for ADNOC assets throughout the last 12 months, solidifying its position as the leading Greece-headquartered Consolidated Contractors Co (CCC) has moved up several spots on our list after securing a major Engineering, Procurement, Construction, and Commissioning (EPCC) contract alongside its joint venture with Technip Energies for QatarEnergy’s North Field South Project. This award will cover the delivery of 2 mega trains, each with a capacity of 8 mtpa of LNG. It will include a large CO2 carbon capture and sequestration facility of 1.5 mtpa, leading to over China Offshore Oil Engineering Co (COOEC), a subsidiary of China National Offshore Oil Corp, claims to be the only large-scale general contracting company in China that integrates offshore oil and gas development engineering and LNG engineering. Established in Bohai Bay, China about 40 years ago, the company posted record revenues of $4.2 billion in 2022 driven by a hefty workload and bumper orders. In May 2023, COOEC won an EPCI order from Saudi Aramco for its $1 billion Safaniya offshore increment project. The scope of work on the Safaniya offshore increment project, which was divided into 10 tenders, includes 13 PMC provider in the region. With over 40 years of experience in the Middle East, several of its previously-awarded contracts received extensions during this period, including general 25% reduction of greenhouse gas emissions when compared to similar LNG facilities. In April 2022, CCC partnered with the Education for Employment (EFE) for a project to train young Saudi women aimed to reduce unemployment and expand economic opportunities for Saudi youth. In December 2022, a consortium of CCC and thyssenkrupp Uhde was awarded an EPCC contract for the world’s largest blue ammonia plant to be built for Qatar Fertilizer Co. offshore jackets that will be built in Qingdao City in Shangdong province. According to media reports, COOEC expects project delivery in July 2024. In October 2022, COOEC and Saipem were awarded a significant EPC package from QatarGas dubbed EPCI 2 that includes two compression complexes intended to sustain production at the North Field. Saipem said at the time of the award that the project will include “two of the largest fixed steel jacket compression platforms ever built”, as well as flare platforms, living quarters, interconnecting bridges, and interface modules. construction management services in Iraq, commissioning support services in Oman, and operations and maintenance support in Saudi Arabia and Kuwait. According to CCC, its participation in the strategic project aligns with the management’s directives of “collaborating with select clients and partners of choice on projects that further advance sustainability in the energy sector.”23 TOP 25 EPC CONTRACTORS oilandgasmiddleeast.comSeptember 2023 19 17 18 Worley Penspen Petrojet Penspen announced a positive start to the fiscal year with $81 million awarded in new contracts during the first half of 2023. In the Middle East and Africa region, Penspen reported 28 new contracts with a total value of $67 million for its Engineering, Project Management Consultancy, and Asset Integrity Service Lines for national and international energy companies as well as EPC contractor clients. “Penspen is proud of its contribution to the development of sustainable energy systems through the use of its deep experience and expertise. We look forward to continuing to Egyptian contractor Petrojet, the executive arm of the Egyptian Petroleum Ministry, is back on the list this year after securing new contracts and executing several key projects in the region. In February 2023, Saudi Aramco Base Oil Co (Luberef) awarded a $148.55 million EPC contract to Petrojet for the Yanbu Growth II expansion project. A few months later, Petrojet secured two EPC packages worth $181 million for Australia-based global engineering services company Worley is seeing investment growth across all its core markets, the company said in its annual report. In November 2022, Worley’s joint venture in Oman with Special Technical Services secured a two-year contract extension to provide EPC services to BP’s Khazzan Gas assets. The scope of work includes brownfield projects and turnarounds, which will help sustain the life of BP’s existing assets in Oman. In July 2022, Worley was awarded two project management service contracts for Aramco’s unconventional gas programme. Under the contracts, Worley will provide FEED, detailed work together with the industry to shape the future of the energy sector,” Peter O’Sullivan, Penspen CEO, said in a statement. In September 2022, Penspen partnered design support, project management services, and construction management services. The term of both contracts is three years with an option for an extension for a further two years. Worley will carry out the work from their Al-Khobar and Houston offices. “Being part of a project that not only looks towards sustainability but also contributes to boosting regional economy demonstrates Worley’s commitment to developing future growth in the location,” Eissa Aqeeli, Worley’s Senior Vice-President and Location Director, Saudi Arabia and Bahrain, said at the time of the contract award. with UAE’s Khalifa University to help future engineers develop the technical competency and real-world experience required to succeed in their fields. ADNOC’s Bab and Asab oil field clusters. Petrojet’s scope of work for Package 1 includes dismantling and reinstatement of existing workover structures, rehabilitation of existing gas production flowlines at Bab, construction of a temporary facility, and tie-in of gas producer wells at Bab and Manifa. In an effort to execute clean energy projects, Petrojet signed an MoU with DNV, the global independent energy expert and assurance provider, to strengthen their collaboration for the energy transition in Egypt through the development of green hydrogen and its derivatives.24 TOP 25 EPC CONTRACTORS oilandgasmiddleeast.comSeptember 2023 22 20 21 Daewoo Engineering and Construction Galfar Engineering and Construction JGC Corp Oman’s Galfar Engineering & Contracting and its subsidiary and associated companies reported a net profit of $3.23 million for the period ending June 2023. The company’s financial position continued to be positive supported by a robust order backlog with stable operating profit. Key to sustaining the company’s order book is a strategy to supplement its longstanding focus on conventional contracting projects with opportunities to be delivered under the Design Build Own Operate Maintain and EPC Japan’s JGC Holdings Corp reported a year- on-year increase in total engineering sales and profits driven by steady progress on major large-scale projects, the contractor said in its latest financial report. Some notable projects include Iraq’s Basrah Refinery Upgrading Project, which includes the construction of a new fluid contact cracking unit, depressurisation distillation unit, and light oil desulfurisation unit. JGC Group is committed to the Korean contractor Daewoo Engineering and Construction (E&C) is back on our list this year after maintaining steady activity in the Middle East region. In June 2023, the contractor’s Nigerian subsidiary secured a $262 million order to build a fertiliser plant in Nigeria. Daewoo E&C reported an all-time high operating profit of $583 million with plans to further increase its order backlog by winning additional orders from key markets such as Libya, Nigeria, and Iraq. Earlier in 2023, the Korean company signed an agreement with Saudi construction giant Alfanar during Saudi Aramco’s iktva models– a trend being witnessed lately in the oil and gas sector. During the period, its parent company Galfar continued to maintain a healthy project pipeline supported by new project awards worth $1.67 billion. The company said it continues to explore opportunities to reduce operating expenses, maintain market competitiveness, and improve the financial results while strengthening the company’s financial position. In 2023, Galfar announced significant new contracts including awards for OQ’s Bisat completion of this project in 2025, which will play a key role in the reconstruction and economic development of Iraq. In May 2022, JGC was awarded a key contract for Aramco’s Zuluf project, which includes work on its onshore gas- oil separation plant and utility facilities, including water injection. The Zuluf project, which is a giant oil field located in the Arabian Gulf, aims to increase production by around 600,000 barrels per day of Arabian heavy crude. “The JGC Group will continue to aim to win orders for projects planned by Saudi Aramco, 2023 Forum and Exhibition. The $1.5 billion agreement signed by Amer Al-Ajmi, executive vice president of Alfanar, and Sungmin Yang, senior vice president of Daewoo, is aimed towards joint cooperation in future projects for the oil, gas, and petrochemicals sectors. Last year, UAE’s National Marine Dredging Co signed a memorandum of understanding (MoU) with Daewoo E&C, in a bid to cumulatively grow business opportunities across the Middle East and Africa. Through the MoU, the two entities will jointly explore onshore and offshore engineering, procurement, and construction projects. Permanent Power Supply Project, ADNOC’s Bab and Asab oil field clusters, and Petroleum Development of Oman’s Qarn Alam oilfield. realizing job creation and technology transfer to many Saudis through the execution of such projects, thereby contributing to the further development of the Kingdom of Saudi Arabia,” JGC said at the time of the contract award.25 TOP 25 EPC CONTRACTORS oilandgasmiddleeast.comSeptember 2023 25 23 24 Robt Stone Heavy Engineering Industries & Shipbuilding Company Lamprell Kuwait’s Heavy Engineering Industries & Shipbuilding Co. (HEISCO) is a new entry on the top contractors’ list. The contracting company, which caters to a diversified range of businesses including oil and gas, petrochemicals, and several others, landed significant contracts in Kuwait and Saudi Arabia during the past year. In Kuwait, the contractor landed multi-million contracts for construction of flowlines and refinery maintenance work. In Saudi Arabia, HEISCO was awarded a $133 million contract for the execution of primary civil and mechanical construction works for the Juaymah Natural Gas Liquids Fractionation (JNGLF), which is UAE-headquartered Lamprell started its business in the oil and gas sector in 1976 and is well-known for building complex offshore and onshore process modules and platforms and fabricating and refurbishing jack-up rigs and lifeboats. In June 2023, Lamprell was awarded an EPCI contract for Aramco’s Abu Safah and Marjan offshore oil fields. The scope of work includes EPCI works for offshore jackets, ROBT STONE is a new entry on our list, as it continues to emerge as one of the fastest- growing EPC contractors in the MENA region, especially in the UAE. Established in Abu Dhabi in 2006, the contractor has steadily grown over the last 17 years. In July 2023, the company secured a major contract from a unit of ADNOC to provide EPC services for its offshore project in Abu Dhabi. The project scope includes EPC of two power skids at Jebel Dhana including modification of various switch gears, additional isolation valves on inlet and outlet connections to small and medium tanks including RGA lightning system for tanks. responsible for providing ethane, propane and butane products to Aramco’s local petrochemical industry through fractionating and treating “The project is a testimony of its strength and proven track record of timely execution of various projects in different ADNOC oil and gas fields like Neb, Asab, Bab, Buhsa, Sahil, Shah, Queshwira, Mender and earlier successful execution in MP-21 with ADNOC Onshore,” a company spokesman said at the time of the contract award. natural gas liquids. In addition, Juaymah also has the capability to export refrigerated propane and butane through export facilities. production deck modules, pipelines, and subsea power cables. Driving strategy and growth through its renewables, oil and gas, and digital business units, the company has worked hard to establish its reputation for delivering projects safely, on time, and within the budget. The company recently secured a subcontract from National Petroluem Construction Company for the construction of five offshore jackets for a major oil and gas project with an overall fabrication weight of almost 14,000 tonnes.26 oilandgasmiddleeast.comSeptember 2023 A s Europe moves away from its reliance on Russian gas and Asia strives to reduce coal dependency, the appeal of LNG investments is at an all-time high. However, with the energy transition gaining momentum, even staunch LNG supporters recognise that this party cannot last indefinitely as the allure of a 30-year LNG investment is beginning to wane. In response to this changing landscape, companies and countries seeking to develop LNG EXPORTS OR BLUE AMMONIA: THE IDEAL CHOICE FOR GAS-RICH NATIONS Gas producers must make a decision either to stick with LNG or explore blue ammonia, a new report shows gas resources for export are facing a crucial decision: stick with the traditional LNG playbook or explore the alternative path of blue ammonia, a recent report by WoodMackenzie shows. Blue ammonia involves producing low- emission hydrogen through gas reforming with carbon capture and combining it with air- sourced nitrogen. The clean energy source has become a credible and attractive alternative to LNG for gas monetisation. Governments are providing increased subsidies to support its development, and rising CO2 costs in key markets are making low-carbon ammonia economically more appealing than unabated versions. Moreover, low-carbon ammonia is now being considered for power generation and in sectors that are harder to decarbonise, such as marine fuels. A STRONG CASE FOR BLUE AMMONIA The nascent blue ammonia industry is gaining traction. QatarEnergy revealed plans for a 1.2 million tonnes per annum (MMtpa) blue ammonia project that could hit the market by 2026. The momentum for blue ammonia is picking up, with several projects announced in the Middle East and US, backed by diverse companies. But the question remains: can blue ammonia truly scale up to become a substantial alternative to LNG? As hydrogen gains ever more attention, the opportunities and challenges facing developers are crystallising, WoodMackenzie notes. Government support is building and definitions as to what denotes low-carbon – or clean – hydrogen are now clearer. While subsidies and rules in most markets focus on 27 REPORT: LNG oilandgasmiddleeast.comSeptember 2023 future LNG demand. In WoodMac’s accelerated energy transition scenario, the world requires far less new LNG supply. Under this scenario, the market will still necessitate the development of 160 MMtpa of new LNG supply as demand reaches 600 MMtpa by 2040. Beyond that, developers face the risk of declining prices and underutilization as demand decreases to 500 MMtpa by 2050. Consequently, these potential risks are already influencing developers’ ability to secure financing. European banks and export credit agencies have withdrawn from directly financing new LNG projects, and others may follow suit due to concerns over LNG’s relatively high emissions footprint before combustion and the risks to project profitability. Given these challenges, those with untapped gas resources must explore alternative avenues to monetise gas exports. Blue ammonia has emerged as a promising option to address these concerns. CONCLUSION While the industry has not yet reached a stage where new LNG investment loses its appeal, it is essential to recognise that displacing coal enabling the scaling up of electrolytic (green) hydrogen, blue hydrogen remains more competitive and offers scale more quickly. And when it comes to the seaborne hydrogen trade, ammonia is the only option in this investment horizon. THE CASE FOR LNG For those with substantial, cost-effective gas reserves, LNG remains the primary choice for exports, especially with global demand on the rise and prices stabilising in Asian markets. In WoodMac’s base-case Energy Transition Outlook, projecting a 2.5 °C temperature increase from pre-industrial levels, LNG demand is expected to reach over 700 MMtpa by 2050. This growth necessitates significant investments in new supply, including the already under- construction 180 MMtpa and an additional 50 MMtpa of new pre-FID supply by 2030 to meet future demand. However, the longer-term prospects for LNG demand and revenue are not set in stone. As the energy transition gains momentum, stakeholders are questioning the assuredness of in Asia remains a crucial policy objective. This drive towards coal displacement will continue to fuel the demand for LNG in the foreseeable future. For LNG players to thrive, a pivotal factor will be the establishment of a rising cost of carbon across the region, as this will bolster the competitiveness of LNG against coal. A simultaneous increase in carbon prices and LNG demand will work hand in hand to support sustained growth in the LNG sector. Moreover, higher carbon costs also present new opportunities for gas resource holders. As the energy transition accelerates, companies must position themselves for this changing landscape. Embracing options such as blue ammonia becomes vital, as it can play a significant role in the transition. Strategic decisions to develop Carbon Capture, Utilisation, and Storage (CCUS) technologies and invest in the blue ammonia value chain, including infrastructure, will not only boost the current demand for LNG but also pave the way for future growth in the blue ammonia sector. By embracing these opportunities, companies can thrive in an ever-evolving energy landscape and contribute to a more sustainable and environmentally friendly future. Source: WoodMackenzie28 ENERGY TRANSITION oilandgasmiddleeast.comSeptember 2023 POWERING THE FUTURE OF MARITIME SHIPPING29 ENERGY TRANSITION oilandgasmiddleeast.comSeptember 2023 T he Middle East’s status as a global shipping hub is undisputed. Not only does its location make it an ideal gateway between the East and the West, but the region also boasts a wealth of well-developed, high-capacity, and easily accessible ports. Even so, Middle East states are not content to rest on their geographic laurels when it comes to long-term seafaring supremacy. Initiatives such as the ‘UAE Maritime Network’ and Saudi Arabia’s ambitious plan to more than double its annual container throughput by the decade›s end will undoubtedly attract further investment. But the future of Middle East maritime doesn’t end with capacity and infrastructure. The region is also investigating novel ways to minimise the sector’s carbon emissions. It›s clear that the maritime sector has already begun its long journey toward sustainability. The question is, how do we reach our destination? FUEL FOR THOUGHT Alternative fuels such as hydrogen, ammonia, hydrotreated vegetable oil (HVO), and liquefied natural gas (LNG), which offer the potential to reduce emissions associated with powering vessels, have an important role to play, but it is paramount to remember that these innovations are still in their infancy. Availability, production capacity, bunkering, storage and ability to use for propulsion are all hurdles that must be overcome before our sector can take full advantage of future fuels. Hydrogen, for example, is widely considered among the best alternatives to fossil fuels. Two kinds of hydrogen fuels often take the spotlight in conversations around sustainable alternatives to fossil fuels, each with its benefits and drawbacks: blue hydrogen is derived from natural gas, which is not infinite, whereas green hydrogen is produced through renewably powered water electrolysis. Blue hydrogen does produce carbon dioxide, which must be captured and then stored alongside some residual amounts of methane gas, often referred to as fugitive leaks. In contrast, there are no greenhouse gas emissions deriving from green hydrogen production. The process is widely considered ‘clean’ as the electricity required to power production comes from renewable sources such as solar and wind energy. The downside, however, is that hydrogen can be difficult to both store and transport due to its low energy density requiring large storage space, and today’s cargo ships are simply not equipped to accommodate its transportation at this given time. Costs must therefore be factored into the suitability of this alternative fuel, as upgraded infrastructure would incur an additional expense. Ammonia, meanwhile, is a lighter-than- air gas that dissolves in water, creating fuel when mixed. It can be manufactured using renewable sources such as biomass, solar, and wind, therefore its production could be considered carbon neutral, although currently, its production is largely still dependent on fossil fuels. Unfortunately, ammonia is also highly corrosive and extremely toxic, meaning that safe storage of sufficient size and the possibility of pollution, if not stored correctly, will be serious issues to consider. HVO is a bio-based liquid fuel comprising vegetable oils such as rapeseed, sunflower, and soybean. It is a stable material that can be used as fuel on its own or mixed Alternative fuels offer the potential to reduce emissions associated with powering vessels Author: Ali Fathi, Managing Partner, International Marine & Energy (IME)Next >