After three rounds of price negotiations, South Korea’s Hanwha Engineering & Construction is expected to sign a KD45.5m ($189m) deal with state-owned Kuwait Oil Tanker Company (KOTC) on 1 September to build a liquefied petroleum gas (LPG) bottling facility in the north of Kuwait.

The engineering, procurement and construction (EPC) contract is expected to be signed on Wednesday, says Nabil Bourisli KOTC’s chairman and managing director, state-run Kuwait News Agency reports.

India’s Larsen & Toubro was previously considered the frontrunner to win the EPC deal after submitting the lowest price in March (MEED 9:3:10).

“We had three rounds of negotiations and prices have dropped significantly. Hanwha came out with the lowest price in the last round”, says a contractor bidding on the deal.

The South Korean firm had originally submitted a price of about KD73m, but reduced its bid by almost 40 per cent despite no reduction in the project’s scope.

The 150,000 square metre facility will be built at Umm al-Aish, 30 kilometres north of Kuwait city. It will include six LPG storage tanks, pump and compressor stations and three production lines, each capable of filing 1,600 12 kilogramme bottles every hour. It will service Kuwait’s domestic market until 2030.

KOTC is responsible for the international transportation of Kuwaiti crude as well as the marketing and distribution of LPG within the emirate.

The construction of the facility will support Kuwait National Petroleum Company’s (KNPC) planned fourth gas fractioning column at the Mina al-Ahmadi refinery. When built, the column is expected to have a capacity to process 550 million cubic feet a day.