Saudi oil giant Aramco has awarded an extension of its Long-Term Agreement (LTA) framework to leading engineering and construction groups - McDermott and Saipem - to support brownfield and greenfield developments on some of the kingdom’s largest offshore assets.
As per the deal, McDermott, a premier, fully-integrated provider of engineering and construction solutions to the energy industry, has been awarded a three-year extension of Aramco's LTA Framework, while Saipem, a global leader in the engineering and construction of major projects for the energy and infrastructure sectors, has signed a renewal for its LTA extending until the 2027-end.
According to McDermott, the extension optimises the current agreement and extends the duration of the agreement.
In line with Saudi Vision 2030, McDermott has ambitious long-term growth plans in Saudi Arabia. Extension of the LTA will bolster support of the in-Kingdom Total Value Add (IKTVA) programme and other local content commitments.
"The extension of this prestigious agreement is testament to our application of project delivery best practices through the past decade on the initial LTA contract and other lump-sum turnkey contracts we hold with Aramco," remarked Mike Sutherland, Senior Vice President, Offshore Middle East at McDermott.
"Aramco’s continued investment in the development and maintenance of the Saudi offshore fields demonstrates their efforts to provide energy reliability," he added.
As part of its commitment to IKTVA, McDermott said it plans to complete construction of its Safira fabrication yard to enhance project delivery capability and support its growing Saudi-based project management, engineering and procurement presence.
Sutherland said McDermott would continue its commitment to recruitment and development of talented Saudi nationals at all levels.
Safira will have the capability to fabricate and assemble the offshore platforms, jackets and structures for subsea pipelines required to support Aramco's planned offshore expansions, he added.
Saipem said with the Aramco decision, it has been reconfirmed in the exclusive list of contractors selected by Saudi Aramco who are eligible to bid for work orders, known as CRPOs (Contract Release Purchase Orders).
These contracts may relate to both the construction of new investment projects and any projects aimed at maintaining production capacity from Saudi Arabia’s offshore fields.
On the renewal of the LTA, Saipem said these contracts will be carried out by a consortium led by Snamprogetti Saudi Arabia (a subsidiary of Saipem SpA) and STAR (Saipem Taqa Al-Rushaid Fabricators Co), which aims to maximise local activities leveraging the local fabrication yard, established in Saudi Arabia in 2008.
Saipem and Saudi Aramco have a long history of collaboration on onshore, offshore and drilling projects, it added.-TradeArabia News Service