Kuwait Oil Company (KOC) has awarded Saudi Arabia’s Al-Khorayef Commercial Company a $308m deal to build a new oil and gas gathering centre in the west of the country.

Al-Khorayef signed a formal agreement with KOC on 14 October, almost two years after the deal was first tendered in November 2008, according to a source close to the project. Bids were submitted on 21 June 2009 after a number of delays (MEED 8:6:10).

Engineering work commenced in August, says the source, although according to the Central Tenders Committee, the deal has not yet been approved.

The contract covers the construction, commissioning, operation and maintenance a crude oil gathering centre (GC-16), with the capacity to handle 100,000 barrels a day (b/d) of sour crude oil from the Minagish, Dharif and Abduliyah fields. The unit will also process 115 million cubic feet a day (cf/d) of associated gas from the fields.

The GC-16 project, which is expected to be completed by the end of 2014, is part of Kuwait’s wider plan to raise its crude production capacity to 4 million barrels a day by 2020.

Kuwait currently pumps approximately 2.3 million b/d, although KOC Chairman, Sami al-Rashaid announced on 18 October that capacity has been boosted to 3.3 million b/d, state-owned Kuwait News Agency reports.

This includes 270,000 b/d from the neutral zone it shares with Saudi Arabia, operated by Al-Khafji Joint Operations. KOC expects to add a further 120,000 b/d by the end of October, taking total capacity to 3.42 million b/d.