Bapco EPC tender cancelled

28 June 2002

The long-awaited upgrade of the Sitra oil refinery has taken yet another twist after the client, Bahrain Petroleum Company (Bapco), cancelled the tender for the engineering, procurement and construction (EPC) contract on the estimated $650 million project.

The three bidders for the contract were the US' Bechtel, JGC Corporation of Japan and Paris-based Technip-Coflexip. It is expected that Bapco will either draw up a new list of EPC contractors that may include the three original bidders or proceed with the scheme on an EPC management basis. No official reason for the cancellation of the tender has been given.

Banks that submitted financing proposals were notified on 26 June that Bapco was reviewing its contracting strategy, and that this will lead to a delay in the award of an EPC contract. Bapco asserted that the review will not have any impact on the financial proposals and that the project continues to have sovereign support.

The Bapco refinery project has been under examination for several years and has encountered a series of delays. Analysts say that the age of the Sitra refinery is such that, without the upgrade, Bapco will find it increasingly difficult to market its products. The proposed work includes the installation of a new hydrocracker, additional off-sites and utilities, a hydrogen unit and a diesel hydro-desulphurisation (DHDS) unit.

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