McDermott wins two EPCI contracts from Saudi Aramco

Posted on 26th February 2019

McDermott wins two EPCI contracts from Saudi Aramco
Image courtesy of: https://www.arabianbusiness.com/sites/default/files/styles/full_img/public/images/2018/04/19/Saudi-Aramco_0.jpg

According to *Constructionweekonline news report, Texas, US-based contractor McDermott slipped into the red with a $2.7bn full-year loss for 2018, but is off to a strong start in 2019 after announcing it has won two engineering, procurement, construction, and installation (EPCI) contracts from Saudi Aramco.

Rising costs on projects in Mexico and the US contributed to McDermott’s 2018 loss, which the contracting firm's president and chief executive officer, David Dickson, said “distract” attention from the company’s “underlying fundamental strength”.

The biggest hit came from McDermott's Cameron liquefied natural gas project in Louisiana, where building costs rose by $168m due to “unfavourable labour productivity” and soaring sub-contract and construction prices.

McDermott's Middle East work generated $417m in revenue, backed by onshore and offshore projects respectively for Adnoc and Saudi Aramco.

The Adnoc Crude Flexibility Project in Ruwais is progressing well, with engineering, procurement, and manufacturing of critical equipment on track, the contractor said. Meanwhile, the Saudi Aramco Shell Refinery upgrade has reached 95% completion on its engineering and procurement scope.

On the same day as its 2018 results were announced, McDermott revealed additional details of its “substantial” EPCI contract, worth between $500-750m, from Saudi Aramco.

As part of the contract, McDermott will set up a 65km offshore pipeline and deliver design, procurement, fabrication, installation, testing, and pre-commissioning services for an offshore tie-in platform at the Marjan oil field.

McDermott will also deliver the same services for six lift topside modules and subsea cabling. Combined, all of this equipment will weigh up to 27,000 tonnes, and the contractor said it will immediately commence work on the contract. 

The contractor's Dubai office will also contribute to the project, with fabrication work to be carried out at its industrial yards in Jebel Ali, as well as Dammam. Engineering work will be split between offices in Dubai and Al Khobar.

Also awarded to the American contractor was a “large” EPCI contract – worth between $50-250m – which covers the upgrade of two platforms at Marjan for Saudi Aramco.

The contractor will install associated equipment for electrical submersible pumps (ESPs), and create space for a high-integrity pressure protection system (HIPPS), subsea composite cable lay, and topside cable tie-ins that may be added in the future. 

Upgrade work for Aramco's Marjan will be implemented from McDermott's Al Khobar office and Dammam fabrication facility, which the contractor said would help raise its 'In-Kingdom' content focused on raising national skills. The contract award will reflect in McDermott's Q1 2019 backlog.

Aramco's is the second engineering contract that McDermott has picked up in Saudi Arabia this year. In January, Daelim Saudi Arabia Company awarded McDermott a fixed lump sum contract for four ammonia tanks and related facilities at Saudi Arabian Mining Company's Ras Al Khair complex. 

*News source: https://www.constructionweekon...

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