Each year, Oil & Gas Middle East puts together a list of the top EPC players that have demonstrated excellence in upstream projects in the Middle East region.

With our 2023 list releasing next month, we wanted to revisit the region’s Top 10 EPC Contractors of 2022.

Lat year, there was a focus on increasing oil and gas production and an urgent need to address climate change issues. Therefore, EPC firms had some hard choices to make. Those who struck the right balance between conventional and decarbonisation opportunities while allocating their resources accordingly made it our list last year.

Methodology: While formulating the list, the Oil & Gas Middle East team took into account financial reports, current and completed projects, project backlog, sustainability initiatives, and the company’s overall impact and future potential in the Middle East.

1. NPCC
2. L&T
3. Petrofac
4. Saipem
5. McDermott
6. Technip Energies
7. Archirodon
8. Técnicas Reunidas
9. Penspen
10. JGC Corp
1. NPCC
NPCC-EPC-2022
NPCC topped the list in 2022 after successfully securing multi-million EPC contracts while managing its backlog and consolidating margins. NPCC kicked off last year with a great start by securing a $2.2 billion award from Saudi Aramco for the Zuluf offshore field.

In July 2022, NPCC secured a nearly $1 billion EPC contract from ADNOC Offshore for the Umm Shaif field after a competitive tender process. The scope of the award covers engineering, procurement, fabrication, installation, and commissioning activities required to maintain Umm Shaif’s 275,000 barrels per day crude oil production capacity.

The list of NPCC’s EPC awards doesn’t end there. In September, the company reportedly inked another $548 million EPC contract from ADNOC to build a new main gas line at its Lower Zakum field offshore Abu Dhabi.

Over the past years, NPCC has also set ambitious targets for the next 5 years aiming for significant long-term and sustainable growth while providing value to all its stakeholders.
According to NPCC, its integration with National Marine Dredging Co in February 2021 has “opened several opportunities due to a broader coverage of the EPC value chain as well as geographical reach.”

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2. L&T
L&T-EPC-2022
India’s Larsen & Toubro (L&T) secured the second spot on our list as the company continued to progress on major EPC contracts in the region. At the end of 2021, L&T closed a giant deal worth $1.6 billion with Saudi Aramco for the giant Jafurah gas development.
Moreover, oil giant Saudi Aramco signed EPC agreements with L&T in July 2022 for various onshore construction projects including enhancing the LPG Piping Network at Ju’aymah NGL, Jubail Industrial gas network, and Ethane Upgradation Facility.

L&T also secured a contract extension with Kuwait Oil Co in August 2022 for the construction of a gas pipeline valued around $450 million. In the Middle East region, L&T said it aims to focus on building partnerships, developing markets for adjacencies in business offerings and nurturing new businesses like asset management and offshore windfarms.

The company said it is currently executing several domestic and international offshore projects, and is committed to building its regional presence in the Middle East by growing local skills and talent, improving procurement from local vendors and engaging commercially with local contractors.

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3. Petrofac
Petrofac-EPC-2022
In 2022, Petrofac moved up on our ranking as the company continues to advance major projects in the region, both offshore and onshore. Moving into the second half of 2022, a significant increase in bidding activity has put the company firmly on the path to grow its backlog over the full year.

Supported by a strong commodity price environment and an increasing focus on energy security, Petrofac is focusing on new energy infrastructure projects, capitalising on the growing investment in this market.

As of 11 August 2022, Petrofac’s E&C division reported 18-month pipeline of opportunities worth $45 billion with $7 billion of bids already submitted and a further $7 billion under tender. Opportunities scheduled for the second half of 2022 are expected to be awarded evenly over the period. Petrofac’s reinstatement to ADNOC’s commercial directory provides significant growth potential in 2023, and activity is picking up across many of its core markets.

Petrofac has set an ambitious target to reach net zero in Scope 1 and 2 emissions by 2030. Also, the company has committed to have 30% women in leadership roles by 2025.

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4. Saipem
Saipem-EPC-2022
Italian service company Saipem also moved up on our ranking after winning several contracts in the region. In July 2022, Saipem signed an industrial national EPC champion implementation agreement with Saudi Aramco. According to a statement from the company, the agreement is part of the Namaat Industrial Investment Programs event, for the execution of onshore EPC projects in the kingdom by a newly established entity, to be incorporated by Saipem and NSH in Saudi Arabia.

Earlier this year, Saipem also announced it won several contracts, both onshore and offshore, in the Middle East worth approximately $1,250 million. The awards relate to the ten-year extension of existing contracts regarding four land rigs.

The company was awarded on August 11, 2022, one onshore and two offshore contracts worth $900 million by the Azule Energy-led New Gas Consortium. The contracts include EPC activities relevant to the Quiluma and Maboqueiro fields’ development project off the northwest coast of Angola. Saipem will handle the EPC activities, including hook-up and commissioning assistance, of the Quiluma platform and of the relevant onshore natural gas processing plant.

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5. McDermott
McDermott-EPC-2022
McDermott completed the transportation and installation subcontract of the Sao Vang and Dai Nguyet (SVDN) gas and condensate field developments in the Nam Con Son Basin, offshore Vietnam.
McDermott retained its spot on our list last year. The Houston, Texas-based contractor started the year by securing a major EPCI contract from QatarEnergy for the offshore scope of its North Field Expansion Project. The contract’s scope includes 13 unmanned wellhead platforms topsides, as well as pipelines, beach valve stations and buildings, representing one of the largest single contracts McDermott has been awarded in its company history.

Commenting on the award when it was announced in January 2022, Tareq Kawash, McDermott’s senior vice president of Europe, Middle East and Africa, said, “For McDermott, this contract shows that we are back stronger than ever and our key customers have confidence in our ability to deliver strategically significant energy infrastructure.”

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6. Technip Energies

Technip Energies, a spinoff of Technip FMC, was back on our list last year. The company along with Abu Dhabi’s National Petroleum Construction Co (NPCC) established a MENA-focused energy company named NT Energies in July 2022. The venture will focus on the UAE and the broader Middle East and North Africa region to provide added value in blue and green hydrogen, carbon capture, waste-to-energy, and biorefining.

Technip Energies CEO Arnaud Pieton said the agreement with NPCC “marks a new milestone in our journey to accelerate the energy transition and limit climate change.”

He added that NT Energies will rapidly bring to life the energy transition infrastructures that the region requires both domestically and for exports.

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7. Archirodon

Archirodon, a European contractor, was a new entry on our list. In June 2022, the company was awarded an EPC contract by ADNOC Onshore worth $173 million to to develop further production capacity of the Asab oil field.

Other current projects that the company is executing include Al Dabbíya development in UAE, where the company is working on the engineering, procurement, construction, pre-commissioning, and assistance in commissioning of two packages in Al Dabb’iya Thamama Zone B Transition Zone.

The company, which was established in 1959, has been a part of the construction of the multi-million dollar seaports of Jeddah and Dammam and other major ports in Saudi Arabia, three ports in the United Arab Emirates, and numerous other marine projects.

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8. Técnicas Reunidas

Spanish contractor Técnicas Reunidas moved up our list last year after securing a major EPC contract from QatarEnergy for the expansion of the existing infrastructure from four new LNG trains North Field Expansion (NFE) The project, which includes the start-up of the first LNG train, is expected to begin by year-end 2025.

The company reportedly recorded contract awards worth $1.2 billion during the first half of the year in line with the recovery trend of investments.

Juan Lladó, chairman of Técnicas Reunidas commented, “I believe that normalisation is the word that best describes the recent evolution of our operations. We are seeing normalisation in project execution, that is reflected in growing sales and operating results, as well as normalisation in client dialogue.”

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9. Penspen

Penspen continued its momentum in the second quarter of 2022 with over seven new contracts in the Middle East across the project management consultancy, detailed engineering, and asset integrity service lines, including a multi-year framework agreement with a major Middle East national oil company.

Recently, the company reaffirmed its commitment to the UAE with a tailored scheme to develop the next generation of engineers.

The scheme is specifically designed for graduates in the UAE and is delivered in partnership with Khalifa University, with the aim to help future engineers develop the technical competency and real world experience required to succeed in their fields.

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10. JGC Corp

JGC Holdings Corporation moved up on our list, thanks to its EPC contract awarded by Saudi Aramco for the Zuluf Arab Heavy Increment Central Processing Facilities.
The EPC award includes the construction projects for the core onshore GOSP and utility facilities including water injection facilities.

JGC credits the award to its relationship with Saudi Aramco, which is founded on its track record of successfully executing projects in Saudi Arabia. JGC also noted that the plan to simultaneously execute the two packages was a key factor in securing the EPC contract.

Moving forward, the JGC Group aims to continue winning projects planned by Saudi Aramco, realising job creation and technology transfer to many Saudis through the execution of such projects.

Source:

https://www.oilandgasmiddleeast.com/

Iran’s latest MoUs: shipping, power and export finance
 by Melodie Michel


The Iranian government has been busy restoring trade and investment relationships since the lifting of nuclear-related sanctions on January 16, 2016. Here is a round-up of the latest economic agreements signed by the country:

Shipping: Oman and Switzerland come on board

Swiss-based shipping company MSC has signed an MoU with the Iran Ports and Maritime Organisation (IPMO) to increase port calls at Bandar Abbas, Chabahar and Bandar Imam. The agreement also involves MSC vessels, which returned to Iran in January after six years, carrying shipments to Iran from international ports, and effectively opens up Iranian investment opportunities to Swiss shipping firms. It was agreed during a three-day visit by Swiss President Johann Schneider-Ammann at the end of February.

Still in the shipping sector, Oman’s Port of Salalah has signed an MoU with Iran’s Shahid Rajaee and Chabahar Ports, to develop and promote an all-water route between the three ports, representing a roundtrip of 2,152 nautical miles. This will ultimately support increased trade and investment between the two countries.

Power: Far-reaching deal with Siemens, collaboration with Ukraine

On March 2, Siemens signed a number of agreements with the Iranian MAPNA Group in order to modernise the country’s energy infrastructure. The MoUs include a licence agreement under which MAPNA will acquire technological know-how to manufacture Siemens F-class gas turbines in Iran. According to Siemens, the parties will co-operate to deliver more than 20 gas turbines and associated generators over the next decade.

As a first project under the licence agreement, the companies signed a contract for the Bandar Abbas power plant, for which Siemens will deliver two F class gas turbines and generators.

The two companies also signed an MoU to jointly develop the roadmap for the extension and optimisation of the overall Iranian power and electrification system, including power generation, transmission and distribution topics, but also providing solutions including EPC (engineering, procurement and construction) as well as financing options.

A Ukrainian delegation arrived in Tehran on Monday (March 7), and had reportedly signed a number of agreements with the Iranian government, including one aiming to resume bilateral energy co-operation. This will help increase the efficiency of Iranian power plants and high-voltage transmission lines.

The two countries are also said to have signed an MoU for the expansion of economic co-operation in the fields of agriculture, metals, mining and aviation.

Export finance: Germany and UK work towards reopening

Iran’s export credit agency (ECA), the Export Guarantee Fund of Iran (EGFI), and its counterpart, UK Export Finance (UKEF) signed an MoU on March 5 to enhance trade and economic co-operation between the two countries.

Under the MoU, the two ECAs will work together to identify opportunities for trade in capital goods, equipment and services. The agreement also allows the parties to co-finance and co-guarantee financing for projects or contracts in third countries involving British and Iranian exports.

Iranian media have also reported that Iran had agreed to clear its US$560mn of cover debt with Germany’s ECA, Hermes, by September, before Germany resumes providing guarantees for German exports to the country.

These latest agreements follow the ones signed at the end of January with France’s Coface and Italy’s Sace on outstanding payments owed by Iranian debtors due to the sanctions that largely blocked money transfers. They are expected to pave the way for the reopening of ECAs’ guarantee lines and a return to business as usual in Iran.

The Role of Engineering, Procurement, and Construction (EPC) Contractors

By Taylor Riso
and Jacob Kunken

The Role of Engineering, Procurement, and Construction (EPC) Contractors

By Taylor Riso
and Jacob Kunken
Photo of a contractor in a bright yellow reflective vest on a jobsite
Last Updated Nov 17, 2023

Engineering, Procurement and Construction, also known as EPC, refers to a specific type of contracting arrangement or project delivery method that is often used for large-scale infrastructure work, industrial facilities, power plants, and other complex construction projects.

Engineering, Procurement and Construction contractors (EPC contractors) are responsible for the entire project lifecycle, from engineering and design to procurement of materials and construction, as well as commissioning and project handover. The EPC contractor provides a comprehensive, turnkey solution, overseeing and managing all aspects needed to deliver a successful project to the client.

In this article, we’ll dive into the roles and responsibilities of EPC contractors as well as the benefits of their involvement in specific types of construction projects.

Table of contents

Roles and Responsibilities of EPC Contractors
Engineering
Procurement
Construction
Other Key Responsibilities
Benefits of using an EPC Contractor
Importance of EPC Contractors
Roles and Responsibilities of EPC Contractors
At a big-picture level, the role of the EPC contractor is to provide an integrated and comprehensive approach to project delivery, managing all aspects of engineering, procurement, and construction to successfully deliver a functioning project to the client.

Throughout a project's duration, the responsibilities of an EPC contractor can be categorized into three major categories that we’ll dive into below:

Engineering
Procurement
Construction
Engineering
Project owners will frequently engage EPC contractors to undertake feasibility studies aimed at evaluating the project's viability. In these assessments, the EPC contractor thoroughly examines the technical, financial, and logistical aspects of the project. These studies play a pivotal role in ascertaining whether the project's engineering prerequisites can be accomplished while adhering to certain constraints such as location, budget, and schedule.

Once the project's scope of work is defined, the EPC contractor assumes the responsibility of crafting comprehensive engineering plans, specifications, and designs for the project. An EPC contractor typically employs a team of skilled engineers and designers who possess expertise in various disciplines such as civil, mechanical, electrical, and other specialties. They collaborate to ensure that all technical aspects of the project are meticulously addressed and that the plans outline all of the project's structural, architectural, and functional aspects.

The EPC contractor also ensures that the engineering designs adhere to all local and national regulations, codes, and standards as well as adhere to required safety, environmental, and building codes.

In addition, EPC contractors actively participate in value engineering, proposing alternative, budget-friendly solutions that simultaneously enhance the design and fulfill the intended functions. Their objective is to strike a harmonious balance between performance, quality, and cost, all while aligning with the owner’s overarching objectives of the project.

Throughout the project's duration, the EPC contractor employs creative approaches to address any engineering challenges that emerge. Their efforts aim to refine designs, enhance efficiency, and overcome any technical obstacles that may impede the successful delivery of the work.

For example, project executives on a New York City subway project opted for aluminum pipes over steel in order to run a glycerin solution through the pipes to freeze the ground in preparation for a tunnel boring machine (TBM) to cut its path.

This ingenuity saved the contractor millions of dollars because the TBM’s cutting head was strong enough to cut through the aluminum, whereas the steel pipes would have to be extracted before the tunnel’s excavation.

Procurement
Procurement is a fundamental pillar within an EPC contractor's role in a construction project. The EPC contractor's involvement in procurement spans the entire spectrum, from selecting and negotiating with suppliers to meticulously managing supply chains and orchestrating logistics.

These contractors bear the responsibility of not only identifying and acquiring all essential materials, equipment, and components from suppliers, manufacturers, and distributors but also evaluating and choosing these suppliers based on critical factors like quality, reliability, cost, and delivery timelines. Beyond the task of identifying and sourcing, EPC contractors are also responsible for managing the purchasing and logistical aspects associated with these components.

During the procurement phase, the EPC contractor also selects their subcontractor partners who will be responsible for specialty scopes. This often involves issuing a request for proposal (RFP) or an invitation to bid (ITB) to attract potential subcontractors. Much like the process of procuring suppliers, the EPC contractor engages in a bidding process when selecting and finalizing contracts with specialty contractors.

As part of their comprehensive approach, EPC contractors often formulate a procurement management plan, essentially functioning as a strategic schedule that ensures the timely receipt of materials, thereby upholding key construction milestones. This plan serves as a blueprint, offering a framework for the entire procurement process, thus ensuring punctual deliveries to uphold the overall construction schedule.

The procurement management plan outlines the schedule for acquiring each item and pinpoints essential procurement benchmarks, which will be continuously adjusted throughout execution to assess potential project effects. EPC contractors will communicate this strategy to the project owner to ensure complete transparency concerning crucial procurement-related pieces. One key component of the procurement management plan is supply chain management. The EPC contractor monitors inventory levels, lead times, and potential supply disruptions to maintain smooth operations.

Once suppliers are identified, the EPC contractor engages in negotiations to secure advantageous terms and conditions, aiming to attain competitive pricing and ensure the timely delivery of materials. Additionally, they formulate contracts that meticulously detail expectations, quality benchmarks, delivery timetables, and terms of payment. The EPC contractor then arranges for the transportation and delivery of materials to the construction site, and accounts for factors such as transportation costs, distance, and other logistics pieces.

After the materials are delivered, the EPC contractor conducts inspections, testing and verification to ensure that they meet the specified quality and safety standards.

An EPC contractor’s proficiency in procurement ensures that the necessary resources are available on time, within budget, and in compliance with quality standards and is key to the successful delivery of the project.

Construction
In the construction phase, the plans and designs developed during the engineering phase are executed. The EPC contractor is responsible for managing construction crews, contractors, and subcontractors to ensure that the project is built according to specifications, safety standards, and timelines. Put simply, the EPC contractor spearheads the construction project management process.

The EPC contractor is responsible for overseeing and managing all of the construction activities of the project. This entails maintaining project schedules, milestones, and timelines to meet project objectives. In addition to ensuring the project stays on schedule, the EPC contractor is responsible for cost control and monitoring construction expenses so that they remain within the predetermined budget.

The EPC contractor additionally enforces quality control procedures to guarantee adherence to predetermined quality assurance criteria and specifications. This encompasses performing thorough inspections and tests to validate the quality and operational integrity of finalized scopes as well as promptly addressing any shortcomings or challenges that arise.

During construction, the EPC contractor implements and enforces on-site safety protocols. With the welfare of all crews, contractors, and subcontractors in mind, the EPC contractor abides by regulatory guidelines and industry best practices to mitigate potential risks.

Throughout the entire construction phase, the EPC contractor oversees both their work crews and subcontractors, while also providing the project owner with regular updates on construction progress, challenges, and any deviations from the devised plan.

Project Management
Build Predictability and Productivity
Deliver projects on time and on budget with greater visibility.

Illustration of graphs layered into a building.
Other Key Responsibilities
In addition to overseeing all aspects of engineering, procurement and construction, an EPC contractor is also responsible for the following:

Risk management: Under an EPC contract, the contractor assumes a higher level of risk, as they are accountable for the successful completion of the project within the agreed-upon parameters. Any delays, cost overruns, or quality and safety issues can have financial and reputational implications for the contractor. A key piece of project execution for EPC contractors entails proactively identifying, assessing and mitigating risks.
Change management: If changes in project scope, design modifications, or unforeseen circumstances arise, the EPC contractor evaluates the impact of these changes on the project's overall schedule, budget and final result and adjusts their course of action accordingly.
Commissioning: After construction is complete, the EPC contractor is responsible for commissioning. All systems and elements are tested and validated to ensure they operate according to their intended function before the project is fully handed over to the client.
Benefits of using an EPC Contractor
EPC contracts offer advantages to both project owners and contractors.

Benefits of an EPC Contractor
Owners Contractors
Turnkey solution
An EPC contract offers the project a turnkey solution, meaning the project owner receives a fully operational building or project at the end of the process. This eliminates the need for separate contracts for design, procurement, and construction, simplifying an owner's responsibilities. The EPC contractor handles all aspects of the project, from inception to completion. Competitive advantage
Contractors with EPC capabilities are less common compared to general contractors and distinguish themselves by offering comprehensive solutions. This competitive edge allows them to stand out, specifically on complex industrial projects or those requiring integrated services.
Single point of responsibility
In an EPC contract, a single contractor (the EPC contractor) takes on the responsibility for the entire project, from engineering and design to procurement of materials and construction. The EPC contractor is responsible for delivering a fully functional project to the client. This streamlines communication and coordination, reducing the owner's administrative burden and the risk of miscommunication between multiple parties. Steady workload
As EPC contractors cover the entire project lifecycle, the workload is more consistent, particularly due to the longer duration of such projects. This extended visibility also allows EPC contractors to forecast farther ahead, leading to more efficient resource allocation and workforce management.
Minimizes risk
Under an EPC contract, the EPC contractor shoulders the majority of the project risk and is responsible for managing and mitigating various risks, such as delays, cost overruns, design issues, and construction challenges. Profitability
An EPC contract typically entails lump-sum or fixed-price arrangements. This empowers EPC contractors to manage costs more effectively and potentially attain higher profit margins as long as they successfully control project costs.
Importance of EPC Contractors
EPC contractors play a pivotal role in delivering complex, infrastructure-heavy projects. Their unique ability to seamlessly integrate engineering, procurement, and construction phases provides a holistic approach that streamlines project execution and minimizes risks for project owners. Whether navigating complex engineering challenges, delivering turnkey solutions, or effectively managing risks, EPC contractors bring a comprehensive approach to deliver efficient project execution.

By carefully evaluating the project's unique requirements, owners can make informed decisions on whether the expertise of an EPC contractor is needed. This decision isn't just about project execution; it's about finding a partner that not only ensures timely and high-quality delivery but also offers an avenue for innovation, optimal resource allocation, and long-term project performance.

As projects become increasingly complex and timelines tighter, the role of EPC contractors and the utilization of EPC contracts continues to be paramount. In an era where projects span multifaceted industries and require intricate engineering feats, the need for a comprehensive approach to project execution is essential in the world of construction.