We see good downstream opportunities – where Petrofac has been extending its credentials.
In addition to our upstream activities, Petrofac is well placed to participate in the market for downstream opportunities in the refining and petrochemical sectors.
Whilst refining and petrochemical investments are forecast to increase globally, we see a particular focus in the MENA region, as resource holders look to industrialise their economies, create employment, and capture more of the value chain.
For example, MEED suggests that the Gulf Cooperation Countries (GCC) are now poised for a boom in petrochemical project awards, with more than US$40 billion of projects already in the design phase – a record high.
Petrofac has continued to build its downstream credentials with several new refining projects secured over the last few years, and we are now bidding on a number of petrochemical projects. We were ranked as first in Refining and Petrochemicals Middle East magazine’s top 30 EPC contractors list. In total, downstream opportunities make up 28% of our 2019 Engineering & Construction bidding pipeline.
Globally, there is a significant proportion of ageing refining infrastructure that is likely to be replaced by new refining capacity designed to meet improved environmental standards. For example, Petrofac, in consortium with Samsung and Saipem, won a project in October 2018 with an overall value of around US$4 billion to transform the existing oil refinery in Sriracha, Thailand, into a more environmentally-friendly facility that will produce higher quality transportation fuels.
We have also been successful in moving into other adjacent sectors such as offshore wind generation. In 2018, for example, we continued to make good progress with the BorWin3 project, with the topside platform installed on the jacket in the German North Sea. We were also awarded a Dutch offshore wind contract by TenneT and a UK wind farm project for Transmission Capital. In total, offshore wind projects account for 10% of our 2019 Engineering & Construction bidding pipeline.