Kuwait Oil retenders water injection facilities contract

18 December 2009

State energy firm invites fresh bids after cancelling original award

State energy firm Kuwait Oil Company (KOC) is inviting firms to bid by 11 May for the engineering, procurement and construction (EPC) contract to build water injection facilities at its northern and central oil fields.

This is the second time KOC has tendered the deal. KOC cancelled the original contract in August 2008, following the bid round earlier that year, after the lowest price, which was submitted by Italy’s Snamprogetti,
came in above the company’s $1.1bn budget.

Sources close to the deal say KOC has now altered the scope of the project and also expects lower prices as Gulf oil and gas construction activity has slowed since its peak in 2008.

Contractors say the scheme will now cost about $700m. The winning bidder will build facilities to collect water produced as a by-product of oil production at the company’s northern and central oil fields.

The winner will also increase capacity at KOC’s seawater treatment plant in central Kuwait by 300,000-500,000 barrels a
day. KOC will reinject the water into the oil fields to maintain reservoir pressure and stabilise production.

KOC has prequalified 15 firms to bid on the deal. They are: South Korea’s GS Engineering & Construction, Hyundai Heavy Industries, Hyundai Engineering & Construction, Daelim Industrial Company, and SK Engineering & Construction; Japan’s Chiyoda Corporation and JGC Corporation; France’s Technip; Italy’s Saipem; the US’ Foster Wheeler and KBR; Canada’s SNC Lavalin; the UK’s Petrofac; Germany’s Lurgi; and Norway’s Aker Kvaerner.

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