The Long-Term Agreements (LTAs) have been announced as part of Aramco’s new contracting strategy for the company’s oil and gas brownfield and plant upgrade projects
The strategy focuses on establishing new businesses and developing partnerships based on sustainability and new technologies via Aramco's giant projects, by awarding long-term contracts to reputable and experienced contractors to improve cost efficiency and the quality and safety of future projects.
Following Aramco’s approval of the new contracting strategy, companies were invited to submit their proposals, and after a thorough evaluation process, eight companies have been selected to carry out the work:
-Consortium of Nasser Saeed Al-Hajri And Contracting /Samsung EPC Co. Ltd.
-Daelim Saudi Arabia Co. Ltd.
-Engineering for The Petroleum and Process Industries (Enppi) Branch.
-GS Construction Arabia Co. Ltd.
-Snamprogetti Engineering and Contracting Co. Ltd. (Saipem).
-JGC Gulf Engineering Co. Ltd.
-Branch of Technip Italy S.P.A.
-Branch of Hyundai Engineering and Construction Co. Ltd.
The scope of the LTAs includes engineering, procurement, construction, start-up, and pre-commissioning of each project, as well as the installation of the upgraded facilities in the designated operating areas. The contracts are established for a period of six years with an option to exercise another six year extension.
The contracts are developed with a special emphasis on improving Saudization, local content and supply chains through Aramco’s In-Kingdom Total Value Add (IKTVA) program, helping Aramco to meet its IKTVA targets. The contracts mandate a minimum commitment to use 39% local content and supply chains initially, increasing to a 60% commitment within six years.
Ahmad A. Al Sa'adi, technical services senior vice president at Aramco, said, “We are delighted to have concluded these LTAs as part of our new strategy, which offers a number of benefits to Aramco and our partners, and it will have a positive impact on the business environment and economic activities in the Kingdom. These LTAs which are associated with huge business which allow us to boost the performance of our brownfield and upgrade projects through new technologies and pioneering environmental sustainability fundamentals, while improving contract procurement and construction phases. In addition, it will enable us to continue developing homegrown talent in Saudi Arabia through achievable employment targets. This is very important to us, as well as contribute to our IKTVA target to increase local content.”
