Kuwait awards $4.3bn deal to Petrofac

11 January 2015

UK firm wins Lower Fars heavy oil development project contract

UK firm Petrofac and Athens-based Consolidated Contractors Company (CCC) has won the engineering, procurement and construction (EPC) contract for the Lower Fars heavy oil (LFHO) development project, with a bid of $4.3bn.

Other bidders for the scheme were:

The single EPC tender is for the first phase of the project’s development and includes the construction of a steam injection facility, production facilities, a support complex, tank farms and a 270,000 barrel-a-day (b/d) pipeline to transport the heavy crude to the planned new refinery at Al-Zour in the south of Kuwait.

State upstream operator KOC first issued a tender for the phase one facilities in October 2013, but the bidding process saw repeated delays.

Mohammed al-Abduljaleel, KOC’s manager of capital project planning, told the MEED Kuwait Projects Conference held in Kuwait on 24-25 November, that phase one would produce 60,000 b/d by 2020.

Under the government’s plans, the development of heavy oil assets in the country is expected to help compensate for declines in conventional oil production.

Spread over 1,200 square kilometres in Kuwait’s northern desert, the Lower Fars reservoir contains between 7 billion and 15 billion barrels of oil in place.

The Lower Fars reservoirs contain heavy oil with a gravity ranging from 17 API to as low as 11, compared with Kuwait’s regular crude blends, which have an average gravity of about 30 API. It is also highly viscous, in the range of 200 to 1,000 centipoise (CP).

To address this, the project will use the cyclic steam stimulation (CSS) technique, where steam is injected into the reservoir to heat the highly viscous oil, making it easier to pump to the surface.

The Petrofac/CCC team was awarded a $1.2bn EPC deal by UK-based energy group BP for the central processing facility (CPF) at Oman’s Khazzan tight gas development in February last year.

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