Thursday, Apr 12, 2007
The Manifa program will support Saudi Arabia's plan to raise production capacity beyond the 12.5 million barrels a day targeted by 2010 from just above 11 million barrels a day now.
Aramco in January signed an estimated $1 billion contract with Belgium dredging contractor Jan De Nul to build a 41-kilometer causeway and 27 drilling islands in the Persian Gulf by December 2009.
The Manifa project also involves the construction of central processing facilities, a water-supply system, four major downstream pipelines and terminal facilities at Al Juaymah and Ras Tanura from where the Arabian Heavy crude will be exported, Aramco said in the report.
The gas and the condensate will be processed at the Khursaniyah gas plant, which will be expanded as part of the Manifa program, Aramco added.
The Dhahran-based company is going ahead with the field development despite rising cost as a result of high project activity in the region, which has lead to a shortage of contractors, raw materials, equipment and qualified labor, and in turn has driven up prices.
Aramco and Dow Chemical Co. (DOW) last week told Dow Jones Newswires that they will go ahead with building a large-scale refinery and petrochemicals complex in eastern Saudi Arabia despite industry estimates that costs have more than doubled to $22 billion.
However, other projects in the region are being delayed or are threatened to be canceled due to soaring cost.
Total SA (TOT) Chief Executive Christophe de Margerie said on April 7 that rocketing costs on a planned $10 billion liquefied natural gas project in southern Iran are a serious threat to it going ahead.
Qatar's Oil Minister Abdullah bin Hamad Al Attiyah said on the same day that he had met in recent weeks with the chairmen of oil and gas contractors to detail his deepening worries about costs that are delaying projects globally.
In February, ExxonMobil Corp. (XOM) and partner state-run Qatar Petroleum agreed to abandon a gas-to-liquids scheme partly due to spiraling cost.
In Kuwait, plans for a new refinery are being reworked after contractor consortia came in with prices in excess of $15 billion, about $9 billion above the original budget.
-By Oliver Klaus, Dow Jones Newswires, +9714 364 4961 Oliver.Klaus@dowjones.com
Copyright (c) 2007 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
12-04-07 0821GMT