Kuwait Oil Company tenders seawater injection deal

13 December 2009

Contractors value the contract at $700m

Kuwait Oil Company (KOC) has invited contractors to bid by 11 May for a major engineering, procurement, and construction (EPC) deal to build seawater injection facilities at its northern and central oilfields.

The May bid round will mark the second time the company has tendered the deal. The original contract was cancelled after the lowest price submitted by Italy’s Snamprogetti in 2008 came in significantly above KOC’s budget at $1.1bn.

Contractors in talks with KOC say that the company subsequently altered the scope of the project and expects to receive lower prices after a slowdown of activity in the oil and gas construction market in 2008 and 2009.

The winning bidder will now build facilities to collect water produced at the company’s northern and central oilfields and processed at three gathering centres, GC-15, GC-23 and GC-25. The contractor will also increase capacity at KOC’s nearby seawater treatment plant by 300,000-500,000 barrels a day. The water will be reinjected into the oil fields to maintain reservoir pressure and stabilise production levels.

Contractors value the deal at a minimum of $700m.

KOC has prequalified 17 international firms to bid on the deal. Five South Korean companies - GS Engineering & Construction, Hyundai Heavy Industries, Hyundai Engineering & Construction, Daelim Industrial Company, and SK Engineering & Construction – are all approved to bid for the contract.

Two Japanese firms – Chiyoda Corporation and JGC Corporation – are prequalified for the deal. The Italian and French divisions of Paris-based Technip and Italy’s Saipem have each been prequalified individually. Two US companies, Foster Wheeler and KBR, have been pre-approved by KOC as has Canada’s SNC Lavalin.

The remaining firms prequalified to bid on the deal are the UK’s Petrofac, Germany’s Lurgi and Oslo-based Aker Kvaerner.

MEED reported in November that KOC planned to retender the deal, with contractors excited about the contract after a fallow period for major contracts in the country.

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