Chiyoda plans to bid for Saudi Aramco projects.

(Image: rasgas-PlantP11.jpg )

JAPANESE oil and gas engineering group Chiyoda Corp says it and South Korea's Samsung Engineering are preparing to bid for two huge export refinery projects planned by Saudi Aramco jointly with Houston-based ConocoPhillips and France's Total.

The orders are estimated to be worth 200 billion yen ($1.8 billion). Chiyoda president Takashi ubota also says in an interview that the company plans to announce one or two alliances with other engineering firms when it unveils half-year results in November. Chiyoda, which saw its profit squeezed last year due to its heavy concentration of contracts in Qatar, is pursuing new contracts in areas such as refineries, development of oil fields and construction of petrochemical production facilities in Asia and Latin America as it aims to diversify income sources and markets. The company last year also sought 60 billion yen in funds from Japan's biggest trading house Mitsubishi Corp by issuing new shares to fund its growth strategy, planned mergers and acquisitions, and to pursue energy-related projects jointly with Mitsubishi, which now owns 33.4 per cent of Chiyoda. "We hope to lower the ratio of profit from LNG projects (by diversifying more) to less than 50 per cent next business year and after from the 70 per cent at present," Kubota says. Chiyoda, which dominates the global LNG project market with a 50 per cent share, saw its net profit plunge 59 per cent to 9.6 billion yen in the year ended in March hit by cost overruns and delays in six multi-billion liquefied natural gas projects, the world's biggest, in Qatar. The result of the bids for Saudi's Yanbu and Jubail refinery projects, designed to process Arabian heavy crude, will be announced early next year, Kubota says. Chiyoda is pursuing new contracts in areas such as refineries. He declines to elaborate on the planned alliances with peer engineering companies. Kubota says Chiyoda plans to double the work force at its Singapore unit, now 150, within two to three years as it aims to boost sales in Asia. It also plans to increase the staff at its Qatar affiliate established in March, Chiyoda Almana Engineering, to 100 to 200 also in within two to three years. the Barzan project Chiyoda, it may be recalled, has been awarded the front-end engineering design (Feed and execution planning contract for the Barzan onshore gas plant which is located in Qatar and under the responsibility of Qatar Petroleum. RasGas Company Limited (RasGas) will direct (oversee) the Feed work. The Barzan project is planned in order to meet the natural gas requirements of the growing local market for electricity and water in Qatar. The Barzan project is included as a part of the gas development scheme for the North Field, the world's largest non-associated gas reserve. The Feed and execution planning work scope is for two gas processing trains with a nominal feed gas design capacity of 1,700 million standard cubic feet per day (mmscfd). The scope also includes definition of a possible third train. The onshore portion of the Barzan project will be constructed on a green-field site within Ras Laffan Industrial City (90 km north of Doha) in Qatar. The Feed work is targeted for completion in the second quarter of 2009. Chiyoda has and is executing a number of Feed and EPC (Engineering, Procurement and Construction) projects for LNG and gas plant facilities in Qatar including Al-Khaleej Gas 1 with capacity of 750 mmscfd and Al-Khaleej Gas Phase 2 with a capacity of 1,250 mmscfd. Lessons learned from these projects, other ongoing LNG projects in the region, as well as its technical experience in processing gas from the North Field are capabilities that Chiyoda brings to the Feed and execution planning work of Barzan. Chiyoda, headquartered in Yokohama, Japan, provides services in the field of engineering, procurement and construction for gas processing, refineries and other hydrocarbon or other industrial plant projects, particularly for gas value chain projects, on a global basis including the Middle East, Russia and South East Asian, Africa and Oceania regions.

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