State oil giant Saudi Aramco said on Saturday it had awarded a contract for the Karan gas field to J.Ray McDermott, which is wholly-owned by US engineering and construction firm McDermott International Inc. The turnkey contract provides for the manufacture and installation of four platforms and the construction of a 110-km-long (68 miles) undersea pipeline to carry the gas from the Karan field, Aramco said in a statement.
It did not disclose the value of the contract. The gas from Karan will be processed at the onshore Khursaniyah gas plant with start-up production scheduled for mid-2011, Aramco said. Karan will produce 1.5 billion cubic feet per day, and will process about 1.8 billion cubic feet per day.
Aramco has awarded onshore contracts for the project to Britain-based Petrofac Ltd and South Koreas Hyundai Engineering and Construction Co Ltd, Aramco has said. The cost of the Karan project was reported to have fallen by at least 20 percent from previous estimates that pegged it as high as $5 billion.
Falling gas supply amid growing power demand in the kingdom has seen the worlds top oil exporter lock in long term purchase contracts for utility fuel totalling around 10 million barrels so far. Aramco has even reversed fuel oil exports and started imports months before the summer to meet rising domestic demand for power.