Kharafi National bids low for gas deal

10 November 2009

Second phase of Kuwait Oil Company’s field upgrade is aimed at more than tripling production capacity

Local firm Kharafi National is the low bidder for the contract to more than triple production capacity at Kuwait Oil Company’s (KOC’s) gas fields by 2011.

The project is the second phase of the state-run energy company’s scheme to boost gas capacity to 1 billion cubic feet a day (cf/d) by 2016.

Kharafi National bid KD439.1m ($1.5bn) for the engineering, procurement and construction deal in the first week of November.

The US’ Processes Unlimited was the second-lowest bidder, with a price of KD499.1m. A third contractor, Kuwait’s Al-Khorayef, bid the highest, at KD749.1m.

Contractors expect KOC to award the contract in the first quarter of 2010.

Under the contract, KOC is seeking to increase gas production capacity to 600 million cf/d from 175 million cf/d, and to triple KOC’s gas condensate production to 150,000 barrels a day (b/d) from 50,000 b/d.

A third phase will take capacity up to the planned 1 billion cf/d and condensate to 350,000 b/d by 2016, but KOC has yet announce when this will be launched.

The second-phase contract covers building crude oil and gas-handling facilities, a sulphur-recovery unit and three associated pipelines. KOC has delayed the bid deadline on the scheme six times to change the scope of the project. It originally set a deadline of 1 March, but has subsequently set dates of 5 April, 31 May, 2 June, 1 September, 6 October and, most recently, 3 November.

Gas from the first phase of KOC’s facilities came on stream in June 2008, two months later than planned, due to bad weather.

KOC will transport gas and liquefied petroleum gas from its fields by pipeline to the Mina al-Ahmadi fractionation trains, which will process it into lean gas feedstock for power generation. Kuwait will export most of the condensate.

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