Kuwait Oil Tanker Company asks for bid bond extension

13 May 2010

Contractors concerned bottling plant deal could see further delays

Kuwait Oil Tanker Company (KOTC) has asked bidding firms for a bid bond extension for a major deal to build a liquefied petroleum gas (LPG) bottling facility, despite already being in direct talks with the low bidder, India’s Larsen & Toubro.

KOTC asked the three lowest bidding firms to extend bid guarantees on commercial tenders submitted in March until 31 July from 31 May. The other three bidders on the deal have not been asked to extend bid bonds.

“There is no winner, the bid bond expires at the end of May, and no extension has been requested so we don’t know what is going on”, says an executive at one of the three contractors not asked to extend its bid bond. “We are waiting for the client to announce something, but they may cancel the project again and retender”.

Larsen & Toubro emerged as the frontrunner for the deal in a 2 March bid round, beating rival proposals from South Korea’s Hanwha, Ireland’s Kentz Overseas, Italy’s Saipem and France’s Entrepose Contracting (MEED 9:3:10).

KOTC originally asked firms to submit proposals for the engineering, procurement and construction (EPC) contract for the bottling plant at Umm al-Aish in the north of Kuwait by 26 January. But on 24 January, the deadline was extended to 2 March after contractors submitted a series of technical questions on the deal.

This is not the first time it has seen delays. KOTC first issued tenders for the scheme in 2006, but the process was started afresh in 2008 for undisclosed reasons.

A subsidiary of Kuwait Petroluem Corporation (KPC), KOTC is responsible for the international transportation of Kuwaiti crude as well as the marketing and distribution of LPG within the emirate.

The winning firm will build a LPG bottling facility at Umm al-Aish, just north of Kuwait City which will include six storage tanks, pump and compressor stations and three production lines, each capable of filing 1,600 12- kilogramme bottles every hour.

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