The award of the contract, which is to develop the world’s largest crude oil to chemicals project in Saudi Arabia, coincided with Crown Prince Mohammed bin Salman’s trip to the UK
Britain’s Wood wins contract with Saudi Aramco and SABIC
British energy services provider Wood Group has been awarded a new contract to develop the world’s largest fully integrated crude oil to chemicals (COTC) complex in Saudi Arabia, on behalf of Saudi Aramco and SABIC.
Wood Group will provide front-end engineering design and project management services during the engineering, procurement and construction phase.
The company will also support the development of the $20 billion complex which is expected to process 400,000 barrels per day and 9 million tons of chemicals and base oils annually.
The announcement was made during Saudi Crown Prince Mohammed bin Salman’s three-day trip to the UK, in which a major focus has been strengthening business ties between the two kingdoms as both enter new eras.
The two countries have set a £65 billion trade and investment target for the coming years, broadening a trading relationship built on defence and security.
On Friday, a senior UK cabinet minister said that the crown prince's visit had presented "significant opportunities" for British businesses.
"Vision 2030 is vital for the future of Saudi Arabia and the wider region, but it’s also an exciting prospect for the UK," international trade secretary Liam Fox wrote in The Evening Standard. "We are a world leader across a range of sectors, and well placed to help with these vital reforms."
The business partnership between Saudi Arabia and the UK was discussed at a CEO conference in London earlier in the week, where Saudi Aramco also signed a number of Memorandum of Understandings (MoUs) and commercial agreements with leading British companies and organisations.
The contract with Wood Group is expected to continue through to the start of operations in 2025.
It follows the signing of a MoU in November 2017 between Saudi Aramco and SABIC to assist in bringing the mega-project to its next stage of development.
The scope of the contract primarily includes the finalisation of the project scope, selection of technology providers, updating project economics and performing the front-end engineering design
Saudi Aramco president and CEO Amin Nasser said the deal was an “important milestone” for the group.
“This is an important milestone in a partnership that we are proud of between Saudi Aramco and Sabic, a partnership that is in line with Saudi Aramco’s strategy for business integration, adding value and tackling global growth opportunities in chemicals,” he said.
He added that the project will achieve a direct conversion rate from crude oil to chemicals of almost 50 per cent. “This offers the kingdom solid opportunities to produce chemicals as a feedstock as part of Saudi Aramco’s efforts to maximise return on investments in hydrocarbon resources,” he said.
Yousef Al Benyan, SABIC vice chairman and CEO, said: “I am very happy and optimistic to see the timely delivery of this key milestone in the strategic COTC project, which through an innovative configuration will generate the world’s highest proven yield conversion rate of oil to chemicals in a competitive and sustainable way.”
The complex will have a major economic impact, Mr Nasser said, and will also help to create thousands of jobs for Saudi citizens.
By 2030, the COTC complex is expected to be a significant contributor to Saudi Arabia’s GDP and play a key role in helping the continued economic diversification away from crude exports to higher value industrial products.
Consistent with the crown prince’s Vision 2030, the project is intended to support the creation of a further diversified world-leading downstream sector in Saudi Arabia.
The MoUs signed by Saudi Aramco during the Saudi-UK CEO Forum further reflect the company’s close ties to Britain and the breadth of its strategic interests.
An MoU with Royal Dutch Shell agreed to jointly pursue international gas business opportunities, including upstream development, liquefaction projects and other aspects of the gas value chain.
An MoU with Chatham House, one of the world’s leading think tanks and research establishments and a frequent host to visiting heads of government and senior political leaders, including high ranking Saudi ministers.
An MoU with Imperial College London, which will seek to establish joint projects targeting frontier technologies and developments in chemical engineering, petroleum and geoscience, mechanical engineering and advanced materials.
An MoU with The Welding Institute, a Cambridge-based independent research and technology institution which is recognised as a global centre of excellence in materials joining and engineering processes.
The four MoUs were complemented during the crown prince’s visit with two other commercial agreements including one with Aberdeen-based Downhole Products to further strengthen Saudi Aramco’s drilling operations.
Following the signing ceremonies, Mr. Nasser said: “Today we are further expanding our relationship with six agreements and MOUs with leading British companies and organisations to support Saudi Aramco’s long business growth strategy.
“At Saudi Aramco we have real, tangible and meaningful opportunities to collaborate and build partnerships now and in the future.
"The strengths of British businesses and industry can play a role in Saudi Aramco’s business plan including in our diversification and expansion strategies underscored by the framework of Vision 2030.”