The Saudi Arabia/Kuwait Khafji Joint Operations (KJO) is expected to award the US’ McDermott and South Korea’s Daewoo Engineering & Construction about $230m worth of contracts for work on its onshore and offshore upgrade programme.

The two contractors were the lowest bidders for the two packages available for the work in the Neutral Zone between Saudi Arabia and Kuwait. McDermott’s bid $106.5m for the offshore work while Daewoo bid $124.5m for the onshore package.

The two packages cover onshore and offshore upgrades of the current facilities, including processing the gas that is currently flared. The work is expected to last 36 months, with completion due for the end of 2014. The processed gas will be used by Kuwait when work is complete.

”Everyone is expecting an award to the two lowest bidders very soon,” says a contracting source from an unsuccessful bidder. “KJO must prefer two separate contractors to do the offshore and onshore work, which is why a joint bid for both packages was not accepted.”

Sources familiar with the project say France’s Technip had the lowest joint bid and had been hoping to be selected. The French contractor bid $142.2 for the onshore package and $108.1m for the offshore package, but it is unclear if they had a lower price for a combined bid.

Technip was not available for comment when contacted by MEED.

For 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 50-kilometre pipeline to the onshore facilities, as well as monitoring stations.

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 of Saudi Aramco subsidiary Aramco Gulf Operations and the Kuwait Gulf Oil Company.