Awards near for key Western Desert packages

03 May 2002

National Oil Corporation (NOC), with its partner, Eni of Italy, is moving closer to awarding key onshore and offshore elements of the $4,500 million Western Desert gas project.

Contractors have been shortlisted for package 3 to install a 520-kilometre twin gas and oil export pipeline between Wafa and Melitah. A team of Italy's Saipem, with Athens-based Joannou & Paraskevaides (J&P - Overseas) has emerged as the frontrunner following the technical and commercial evaluation of bids.

The other bidders are Argentina's Techintand Athens-based Consolidated Contractors International Company (CCC). China Engineering Petroleum & Construction Company (CEPCC)applied to enter the competition after the deadline for the submission of final prices. The package is valued at Eur 150 million ($134 million).

The pipeline will connect gas-processing and production facilities, being built in Wafa block NC-169 by a team of Japan's JGC Corporation, with Italy's Tecnimontand its Paris-based subsidiary Sofregaz, and the export terminal at Melitah. Facilities at Melitah will collect gas and condensate for export from both Wafa and the Bouri field, in offshore Block NC-41 (MEED 8:2:02).

An award is also drawing near for the main offshore packages 5, 6, and 7. Saipem, with South Korea's Hyundai Heavy Industries Company, is tipped to take package 5, for the construction of production platforms in Bouri. Contract negotiations are understood to be under way between the client and the Saipem joint venture. The other bidders are France's Bouygues Offshoreand Setal Construction & Engineeringof Spain, with Oderbrechtof Brazil. The package, which is valued at Eur 750 million ($700 million), involves the construction of platforms for up to 15 wells, situated in water at a depth of 150 metres (MEED 30:11:01).

Saipem is also in a strong position for package 6 to install sealines and gathering systems in NC-41. The other bidders for the estimated Eur 200 million ($179 million) contract are Swiss-based Allseasand the French/Norwegian Stolt Offshore. The package entails the installation of a 16-inch-diameter, 110-kilometre-long condensate pipeline and a 30-inch-diameter, 110-kilometre-long gas pipeline.

Two groups were invited to submit final prices on 28 April for package 7 to install subsea equipment for a further 11 wells. They are the Anglo/Norwegian Kvaerner E&C, with Italy's Micoperi, and Bouygues, with UK-based Cooper Cameron Corporationand France's Doris Engineering. A group of Saipem, with the European arm of FMC Energy Systems and Italy's Tecnomare, also priced the work but was not invited to participate in the final round. The project is valued at Eur 145 million ($129 million).

Final prices were due in late April for package 8 to build a gas treatment plant at Melitah. JGC, with Tecnimont and Sofregaz, is up against a team of Italy's Snamprogetti, with Swiss-based ABB Lummus Globaland Hyundai. The project, which is valued at Eur 750 million ($670 million), covers the installation of gas-sweetening facilities, gas dew point control units, and condensate treatment and sulphur recovery facilities that will process gas prior to export via the 570-kilometre Green Stream trans-Mediterranean pipeline.

Agip Gas, a joint venture between NOC and Eni, will manage and operate the facilities. The company has firm offtake agreements for 8,000 million cubic metres a year (cm/y) of gas in place with European customers. Gaz de Franceand Italy's Energiahave each signed up for 2,000 million cm/y and Italy's Edison Gashas agreed to take the remaining 4,000 million cm/y. Each offtake is for a 24-year period on a take-or-pay basis starting from 2004 (Libya, MEED Special Report, 17:8:01, pages 24-25).

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