L&T consortium secures $1-bn Saudi Aramco expansion contract

A consortium of India's Larsen & Toubro (L&T) and Singapore-based Emas AMC has secured a $1 billion-plus contract from state-run oil giant Saudi Aramco for the expansion of its offshore Hasbah sour gas field, reports quoting industry sources said.

The contract for the expansion scheme includes building platforms and pipelines, with the field's supply feeding the Fadhili gas plant, a $6 billion complex that will include a gas processing unit and sulphur recovery.

This is the second major contract the duo had has won in recent months. The L&T-Emas consortium had last year also secured a long-term contract with Aramco to work on offshore facilities.

The Hasbah gas field expansion will supply 2 billion standard cubic feet per day (scfd) of gas to the Fadhili plant, for which Aramco awarded a construction contract last year.

The remaining 500 million scfd of supply for the plant will come from the onshore Khursaniyah field.

Increasing supply of gas is a top priority for Saudi Arabia, reports quoted sources close to the matter as saying.

Saudi Arabia, which currently utilises most of the gas it produces as fuel for power generation and water desalination, it wants to export it instead.

Hasbah already feeds Wasit, another major gas plant. Aramco said in March it had started producing natural gas from the offshore field ahead of peak summer demand in the world's largest oil exporting country.

Many industrial companies have complained about a shortage of gas hurting their expansion plans, as Saudi Arabia tries to use more of the fuel for power generation and water desalination instead of burning crude oil, says the reports.