Al-Khafji Joint Operations tenders Neutral Zone gas pipeline

14 February 2011

New pipeline will transport gas from the Neutral Zone to Kuwait City

The Saudi Arabian/Kuwaiti Al-Khafji Joint Operations (KJO) has released the engineering, procurement and construction (EPC) tender for a planned $114m natural gas pipeline that will run from the Neutral Zone to Kuwait City.

The study is now complete and bids are currently being formulated by prequalified contractors with the submission date set for 14 March. The work is expected to last for three years.

“Bids will be going in for this project in March,” a contracting source says. “It is a relatively straightforward project, but Kuwait will want to get access to the gas as soon as possible.”

The source declined to name the prequalified contractors citing confidentiality issues.   

When completed the pipeline will transport natural gas as well as natural gas liquids from fileds in the Al-Khafji region of the Neutral Zone to Kuwait City where it will be used as a feedstock for power generation.

The Neutral Zone is a demarcated area between Saudi Arabia and Kuwait. Oil revenues from this area are shared between the two countries.

KJO is a joint venture company with Saudi Aramco owning a 50 per cent stake and Kuwait Gulf Oil Company also owning 50 per cent. The company was formed to conducted exploration and production of the hydrocarbon resources in the Neutral Zone between Saudi Arabia and Kuwait.

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