Italian drilling services firm Saipem (ticker: SPM) has been awarded more than $1.6 billion in contracts for offshore engineering and construction; the most significant contract relates to the field development project for the supergiant Zohr gas field, off the Egyptian coast in the Mediterranean sea.
Zohr Gas Field
Petrobel has awarded Saipem an Engineering, Procurement, Construction & Installation (EPCI) contract for the accelerated start-up of the development project for the Zohr Gas Field. Petrobel, a joint venture between Eni and EGPC (Egyptian General Petroleum Corporation) is in charge of the development of Zohr on behalf of PetroShorouk, a joint venture between EGAS (Egyptian Natural Gas Holding Company) and Eni.
The scope of work of the contract encompasses the installation of a 26-inch gas export trunkline and 14-inch and 8-inch service trunklines, as well as EPCI work for the field development in deep water (up to 1700 meters) of six wells and the installation of the umbilical system. Work will start in July 2016 and is due to be completed by the end of 2017.
“We are very pleased to have been selected for the important objective of delivering first gas from Zohr before the end of 2017”, Stefano Cao, Saipem CEO, said in a statement. “We will mobilize a fleet of vessels with last-generation capabilities, and leverage on our proven expertise and consolidated presence in the area in order to ensure our clients achieve their targets.”
The Zohr gas field was discovered by Eni in August 2015, using the drillship Saipem 10000, which is still operating in the area.
Saipem 10000 Drillship
The discovery last summer of the Zohr gas field off the coast of Egypt launched high hopes for Egypt’s revenue stream. The field by some estimates may hold 30 Tcf of natural gas. It is the largest gas field ever discovered in the Mediterranean. Wood Mackenzie said Zohr could prove to be transformational for the Egyptian market.
“We expect Zohr to be the biggest project sanctioned globally in 2016, with an estimated budget of over US$14 billion. Eni plans a fast track phased development with around 800 MMcf/day of production in the first phase, from late 2017, ramping up to 2.6Bcf/day by 2019,” the WoodMac report summary states. The firm said it believes meeting the aggressive timeline set by Eni “will be challenging.”
