Bapco to issue LSDP tender

13 September 2002

Bahrain Petroleum Company (Bapco)is preparing to issue in mid October the invitation-to-bid (ITB) documents for its low-sulphur diesel production (LSDP) project at the Sitra refinery. Eleven contractors applied to prequalify in August for the project, which is being retendered following a change in implementation strategy (MEED 26:7:02).

Bapco initially planned to let the work on an engineering, procurement and construction (EPC) basis. However, prior to the award of the contract in June, the company moved to a revised EPC management (EPCM) model. The scope of works remains unchanged.

Japan's JGC Corporation, Bechtelof the US and Paris-based Technip-Coflexipwere competing for the EPC contract. They are understood to have applied to prequalify for the revised tender along with: ABB Lummus Global, Kellogg Brown & Root, Stone & Webster Engineering Corporationand Foster Wheeler International, all of the US, Lurgi of Germany, Italy's Snamprogetti, and Japan's Chiyoda Corporation. Bapco intends to shortlist five contractors for the EPCM tender. The main element of the scheme covers the installation of a 40,000-barrel-a-day (b/d) hydrocracker for LSDP licensed by Chevron Lummus Globalof the US. Bechtel prepared the front-end engineering design (FEED) studies for the plant (MEED 1:3:02).

'The reason for the retender is simple.' says Abdul Hussain Ali Mirza, deputy chief executive (downstream), Bapco. 'We moved from an EPC strategy to an EPCM model. We didn't want one contractor taking everything.'

The 250,000-b/d Sitra complex produces mostly low grade middle distillates for export and provides Bahrain with all its domestic fuel needs. In 1998 the Supreme Oil Council agreed to invest heavily and move ahead with the LSDP project and a series of strategic upgrades, aimed at the production of high quality gasoline and aviation fuel (see Special Report).

In 2001 the refinery completed its $29 million Kerosene Merox upgrade for blending high octane jet fuel. JGC has also completed work on the installation of a $65 million in-line blending plant, while France's Cegelecis in the final stages of work on a $59 million instrumentation unit modernisation contract.

'The LSDP programme will place Bapco in a strategic position for the future. It will reduce operating costs, improve product yield and meet new regulatory standards. The company is 70 years old and we fully intend to carry on refining oil for another 70 years,' says Mirza.

The government has recently given the go-ahead for Bapco to carry out a feasibility study on a proposed $1,500 million venture that will produce ethylene, propylene and downstream derivatives. Bapco plans to invite prequalified consultants to bid in late September to carry out an initial feasibility study (MEED 30:8:02, Petrochemicals).

'The project will use naphtha from Bapco for conversion to petrochemicals. It is a major scheme that will require an extensive feasibility study. If the project's commercial viability can be proven it will be extremely important for our future and help us to build on what we already have,' says Mirza.

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