Kuwait invites firms to submit applications to build oil facilities

26 August 2008

State upstream operator Kuwait Oil Company (KOC) has invited international and local companies to submit prequalification applications by 7 September for concessions to build, own, operate and maintain oil and gas facilities in Kuwait.

Interested companies must have built an oil or gas processing facility worth more than $150m over the past 10 years and should have experience of process engineering work.

In addition, they must have experience of operating plants with capacity in excess of 25,000 barrels-a-day of oil or 50 million cubic-feet-a-day (cf/d) of gas.

The prequalification documents do not specify what facilities will be tendered following prequalification but the most likely plant to be included is the second-phase early production facility. This will be used to ramp up the state’s gas production to 600 million cf/d.

Concessions such as this can arouse controversy in Kuwait because it is illegal for the state’s natural resources to be owned by foreign entities. However, in answers to questions from prospective bidders, KOC has confirmed that the tender will involve ownership of the facility by the concessionaire.

KOC generally uses outsourced facilities as pilot plants to mitigate risk. Normally such facilities are operational for about five years, before the client decides to build permanent, state-owned and funded facilities.

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