Hyundai bids low for Kuwait pipeline deal

28 April 2010

Pipelines from Mina al-Ahmadi refinery to power plants

South Korea’s Hyundai Engineering & Construction has emerged as the frontrunner to win two major pipeline construction deals in Kuwait after submitting the lowest prices in a 27 April bid round, a source close to the project tell MEED.

Hyundai’s prices for the two packages were $1.39bn (KD404m) and $342.7m and beat rival proposals from the UK’s Petrofac, France’s Technip, Italy’s Saipem, Daelim Corporation and SK Engineering & Construction, both of South Korea.

The highest bid, from Technip came in at a total of $3.16bn for both packages, almost 45 per cent higher than Hyundai’s total price.

The winning firm will build a series of pipelines for Kuwait Oil Company, including low sulphur fuel oil pipelines, running from Kuwait National Petroleum Company’s (KNPC) Mina al-Ahmadi refinery to power plants across the country. The refinery is located approximately 45 kilometres south of Kuwait City. The pipelines will provide feedstock to power plants at Doha East and West, Subiya, Shuaiba and Al-Zour.

The US’s Fluor Corporation is the project management consultant for the scheme.

The deal has been broken down into two phases: the first phase involves the installation of three 48-inch pipelines, and one 40-inch pipeline. The second part of the project covers the construction of a pumping station at Mina al-Ahmadi, along with a metering and corrosion monitoring system.

Technical and commercial bids were originally due to be submitted on 21 March, but Kuwait’s Central Tenders Committee (CTC) postponed the closing date to allow contractors more time to prepare for the deal after a number of firms had asked for an extension (MEED 21:3:10).

This deal could be the South Korean firm’s first major contract in Kuwait’s oil and gas sector since it was awarded a $400m deal for KNPC’s ethane gas recovery expansion project at Mina al-Ahmadi in the beginning of 2005.   

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