Spain's Tecnicas Reunidas leads bidding for Aramco gas projects

KHOBAR, Saudi Arabia, Oct 23 (Reuters) - Tecnicas Reunidas has offered the lowest bids to build two gas projects which are planned by state oil giant Saudi Aramco, sources familiar with the plans said on Monday.

While the Spanish engineering firm has made the lowest bids on the Haradh and Hawiyah gas compression stations and the Hawiyah gas plant, Italy’s Saipem and Samsung E&C are also well placed to win the Hawiyah gas plant work, they said.

Aramco plans to expand the processing capacity at Hawiyah by 1.3 billion standard cubic feet per day (scfd) from 2.5 billion scfd of gas at present.

The new gas compression plants and the expansion of the Hawiyah gas plant are expected to cost more than $4 billion, industry sources have estimated.

Saudi Aramco does not comment on its business transactions, it said in response to an emailed request for comment.

Tecnicas Reunidas declined to comment, while Saipem had no comment and a spokesman for Samsung Engineering said it had no new information on the bidding progress.

“We expect results to be announced (at the) beginning of November,” he said.

Hawiyah and Haradh are part of Ghawar, the world’s largest onshore oilfield.

Gas will play a key role towards the diversified energy mix which Saudi Arabia is keen to achieve by cutting the use of crude oil and liquids for power generation, while allocating more gas to fuel economic growth and industrialisation.

The kingdom is targeting raising the use of gas in its energy mix to 70 percent, officials have said.

Despite falling oil prices, Saudi Aramco is pushing ahead with oil and gas projects that it has highlighted as a priority for the long term to keep the world well supplied with oil, while meeting domestic gas demand.

It plans to nearly double gas production to 23 billion standard cubic feet a day in the next decade. (Reporting by Reem Shamseddine; additional reporting by Yuna Park in Seoul, Robert Hetz in Madrid and Stephen Jewkes in Milan; editing by Alexander Smith)