Page 10 - DMEA Week 01 2021

DMEA COMMENTARY DMEA

Saudi Arabian oilfields.
Source: Saudi Aramco.

Downstream expansion? been halted for several major facilities, includ-
While the consultation with Moelis is ongoing, ing engineering, procurement and construction
Aramco is understood to be still maintaining (EPC) work on gas compression and processing,
its aggressive approach to ensuring long-term and sulphur recovery.
outlets for its crude and products. With this in The news follows the submission of bids in
mind, the company is reported to be interested October by four international services firms.
in acquiring a 30% stake in the Gdansk refinery Sources quoted by Upstreamonline that tech-
in Poland from local firm Lotos. nical and commercial bids had been submitted
The acquisition would appear to compound for a ‘compression package’ by Larsen & Toubro
the misery of the losses suffered throughout the of India, Italy-based Saipem, JGC of Japan and
company’s downstream segment; however, it South Korean firm Hyundai Engineering &
would accord with the supply routes goal as well Construction. The work was expected to cover
as the aim of Poland’s PKN Orlen, which is set to three gas compression plants catering to 600
complete the takeover of Lotos. mmcf (17 mcm) per day of gas and 150,000 bpd
Prior to the completion of the takeover, Lotos of NGLs and condensates.
was instructed by the European Commission to In February, Aramco announced that it had
divest assets, while PKN Orlen has a stated goal received regulatory approval from the Minis-
of further reducing its reliance on Russian oil, try of Energy to proceed with the expansion of
which amounts to roughly 70% of the crude the Kingdom’s unconventional gas production
processed by the firm. capabilities. The main focus of the initiative is
For Aramco, gaining a foothold in Poland Jafurah, which holds an estimated 200 trillion
would bring opportunities to compete further cubic feet of gas (5.7 trillion cubic metres),
with Russian producers Rosneft, Lukoil et al, for around half of which is comprised of liquids.
demand in northern Europe, with German ter- The field is Saudi Arabia’s largest deposit of
minals located nearby. unconventional gas.
A shortlist of potential bidders is expected The cancellation comes as something of an
to be completed during Q1, with the deal to be embarrassment for Aramco, which had sought
finalised by November. to ringfence the development of unconventional
gas, with oil feeling the full brunt of the compa-
Jafurah cancellation ny’s cost reduction efforts. However, the latest
Back home, in December Aramco also cancelled moves give momentum to rumours that all bets
tenders for facilities related to the $110bn project are now off for Aramco and are only likely to add
to develop unconventional gas at the onshore to speculation that the company will either take
Jafurah field. drastic measures to fulfil its dividend obligation
Bidders were informed that contracting had or fail to meet it. ™

P10 www. NEWSBASE .com Week 01 07•January•2021