BP is expected to award contracts on packages for export pipelines at its $16bn Khazzan Tight Gas Project in Oman during the second quarter of 2015, according to sources close to the award process.

The UK-based oil major has received engineering, procurement and construction (EPC) bid prices from contractors vying to carry out work on the project’s condensate and gas export pipelines.

Companies bidding for the two packages are thought to include:

• Galfar Engineering & Contracting (Oman)
• Gulf Petrochemical Services & Trading (GPS, Oman)
• Punj Lloyd (India)
• The Oman Construction Company (Toco)

“We have submitted the commercial bids and we hope it will be awarded in the next quarter,” says a source from an EPC contractor. The packages were tendered during the third quarter of 2014.

The Khazzan tight gas scheme, located at Block 61 in north-central Oman, will have the capacity to produce 1.2 billion cubic feet a day (cf/d) – increasing the sultanate’s gas capacity by about a third.

The gas export pipeline will connect the Khazzan central processing facility (CPF) to the gas network at Saih Nihayda with a 60-kilometre (km), 36-inch pipeline.

The condensate pipeline package comprises the construction of a 12-inch, 68km pipeline to transport stabilised condensate from Khazzan to Petroleum Development Oman’s (PDO’s) pipeline network at Yibal.

The government gave the final go-ahead for BP to develop the Khazzan field in December 2013 and the British company has formed a 60:40 joint venture with Oman Oil Company for Exploration & Production (OOCEP) to operate the asset.

In February 2014, the first major construction contract on Khazzan was awarded. A consortium of the UK’s Petrofac and Athens-based Consolidated Contractors Company (CCC) won a $1.2bn EPC contract for the CPF.

Other major contracts still to be awarded on the project include the gas gathering pipelines package, which is also expected to start construction in 2015. The package will cover a large, dispersed, buried gathering system to transport multi-phase gas condensate from the well sites to the under-construction Khazzan CPF. It will comprise more than 400km of pipelines.

According to BP’s development plan, the first gas is due to be produced from the CPF in 2017, with production ramping up to full capacity in 2018.

The Khazzan project is the largest single upstream development in Oman’s history and will significantly boost the sultanate’s domestic gas supplies to the power sector and help sustain liquefied natural gas (LNG) exports.

Follow Mark Watts on Twitter: @MEEDMark