The Saudi Arabia/Kuwait joint venture Khafji Joint Operations (KJO) has released the tenders for the engineering, procurement and construction (EPC) facilities for its onshore and offshore upgrade project.

At least 12 EPC contractors are understood to be bidding on the two packages available, with some bidding for both and others just bidding on either the offshore or onshore section.

Both packages are being executed to increase crude and gas production from the Neutral Zone between Saudi Arabia and Kuwait.

“I am surprised at how many contractors want to bid for this work,” says a source familiar with the deal. “I think KJO would prefer everyone to bid for both packages, with those not technically capable forming a consortium with another company.”

At least seven contractors want to submit a bid for both packages, which are worth a total of about $600m. Bids are due to be submitted by June 12, with a decision expected in the third quarter of 2011. The work is expected to last 36 months, with completion due for the end of 2014.

The companies looking to bid include:

• Daelim (South Korea) – onshore package
• GS Engineering & Construction (South Korea) – onshore package
• Hyundai Heavy Industries (South Korea) – both packages
• J Ray McDermott (US) – offshore package
• Larsen & Toubro (India) – both packages
• Petrofac (UK) – both packages
• Saipem (Italy) – both packages
• Samsung Engineering (South Korea) – both packages
• Sinopec (China) – onshore package
• SNC Lavalin (Canada) – both packages
• Techint (Italy) – onshore package
• Technip (France) – both packages
• Intecsa Industrial/Initec Energia (Spain) – onshore package

In regards to the onshore package, the scope of works includes the construction of a crude and gas treatment plant, gas and natural gas liquids (NGL) collection and distribution facilities, with associated onshore gas facilities.

The offshore package includes the demolition and replacement of some existing offshore platforms, the laying of a 50km pipeline to the onshore facilities, as well as monitoring stations.  

“The pipeline is the main part of the offshore package and that is what most of the companies are interested in,” the source says.

In October 2010, Technip was awarded a $400m contract by KJO to oversee its oil operations in the offshore area of the Neutral Zone (MEED 15:10:10)

KJO is responsible for oil operations in the Neutral Zone, an area between Saudi Arabia and Kuwait where the border is not properly defined. The company is a joint venture between Saudi Aramco subsidiary Aramco Gulf Operations and the Kuwait Gulf Oil Company.