Saudi Aramco, one of the world’s largest energy companies, awarded two major contracts to the Tecnicas Reunidas-Sinopec joint venture, which will develop new Natural Gas Liquids (NGL) fractionation facilities in Saudi Arabia.
The projects will be executed through two engineering, procurement, and construction (EPC) contracts:
- One agreement involves the execution of Riyas NGL Fractionation Trains (package 1); and
- the second contract encompasses Riyas NGL Common Facilities, including utilities, storage, and export facilities (package 2)
The combined investment for these contracts exceeds 3.3 billion USD, which highlights the magnitude of the project.
Saudi Aramco's new NGL fractional facilities - Technical Details
Técnicas Reunidas and Sinopec Engineering Group will be developing new facilities to fractionate 510 thousand barrels per day (MBD) of Natural Gas Liquids (NGLs). Further details about each package are shown below:
Package | Description | Estimated Construction Duration |
Riyas NGL Fractionation Trains (Package 1) | Consists of two trains, each processing 255 MBD. Incorporates fractionation, treatment, dehydration, and refrigeration units. | 46 months |
Riyas NGL Common Facilities (Package 2) | Common facilities include feed and product surge storage, chemicals storage, and utilities. Utilities comprise steam and condensate recovery systems, utility water, plant and instrument air, nitrogen systems, machinery cooling water, drainage, and flare systems. | 41 months |
According to Tecnicas Reunidas, the project will involve a total maximum workforce of 575 engineers, over 70% of being provided by the Spanish Contractor.
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Saudi Aramco's new NGL fractional facilities - Contracting Approach
The joint venture between Técnicas Reunidas S.A. (TR) and Sinopec Engineering Group (SEG) was awarded a lumpsum contract for the Riyas NGL Fractionation Facility. In this contracting approach, the Contractor typically takes on board most construction risks and is in charge of the facility’s engineering, procurement, and construction, as detailed in the figure below.
Suggested Reading: What is an EPC Contract? (Key Features, Examples, and Tips)
The Owner benefits from increased cost and program certainty, the utilization of multiple insurances safeguarding against delays and plant performance issues (i.e. performance bonds), and a single touch point through the implementation of EPC contracts.
In industrial projects, EPC contracts are commonly initiated following a comprehensive front-end engineering design study, with the final investment decision typically made by the owner, in this instance, Saudi Aramco.
Saudi Aramco's new NGL fractional facilities - Tecnica Reunidas-Sinopec JV Details
The joint venture is structured with 65% ownership by Técnicas Reunidas and 35% by Sinopec Engineering Group. This arrangement translates to Técnicas Reunidas contributing over 2.15 billion USD to the total investment, while the remaining 1.15 billion USD is attributed to the Chinese Group.
Notably, this marks the initial project awarded to Técnicas Reunidas by Saudi Aramco subsequent to the recent signing of a Strategic Alliance between the Spanish company and Sinopec Engineering Group for collaborative development on common projects.
