EXCLUSIVE: Kuwait prepares to tender two Jurassic gas packages

18 June 2018
Expressions of interest were submitted by contractors in May

State-owned upstream operator Kuwait Oil Company (KOC) is preparing to tender two large works packages as part of a broader scheme to process gas from Kuwait’s Jurassic fields in the Middle Marrat reservoir.

Expressions of interest (EoI) for the two packages were submitted by contractors before the end of May, according to industry sources. 

The scope of the two packages includes sour gas processing facilities and transmission infrastructure.

Both packages will be tendered using Kuwait’s early production facility (EPF) contract, rather than the engineering, procurement and construction (EPC) model.

Kuwait’s EPF contracts are similar to contracts that use the build-operate-transfer (BOT) model, which allows the main contractor to recover costs by operating the facility before it is transferred to a public company. 

These packages are being called Jurassic Production Facilities (JPF) by KOC.

Contractors have not yet been informed of the exact size and scope of the packages, which are thought to be either a partial or full retender of KOC's Jurassic Gas Facility Phase 1 a megaproject. 

Jurassic Gas Facility Phase 1 was tendered in September 2017, but then officially cancelled by KOC in a statement published in December. 

The original project was estimated to be worth $3.6bn. 

“It is not yet known if the two packages will include the whole scope of Jurassic Gas Facility Phase 1,” says one industry source. 

“KOC may have scaled down its vision for this project, or it could be planning to execute some parts of the original project at a later date.”

The scope of Jurassic Gas Facility Phase 1 included a central processing facility (CPF), offsite facilities and a pipeline gathering system.

Under the original plans the CPF was due to have the capacity to process 590 million cubic feet a day (cf/d) of gas, 220,000 barrels a day (b/d) of oil and 1,200 tonnes a day of sulphur. 

The scheme was being developed to meet Kuwait’s growing gas demand and its cancellation was seen as a setback to government plans to produce more than 4 billion cf/d of natural gas by 2030, primarily to meet power generation requirements. 

Kuwait currently burns a large volume of oil products to meet its utility needs. 

Prior to the cancellation of the tender, Jurassic Gas Facility Phase 1 was scheduled to be completed in 2021.

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