Kuwait Oil Tanker Company (KOTC) and India’s Larsen & Toubro expect to sign a letter of intent for the award of a deal to build a liquefied petroleum gas (LPG) bottling facility before the end of July.

Sources close to the deal expect a letter of intent to be issued despite earlier fears that the deal may be retendered following a series of delays. The scheme was first tendered in 2006, but the process was started afresh in 2008 for undisclosed reasons.

In early May, KOTC asked the three lowest bidding firms to extend bid guarantees on commercial tenders submitted in March until 31 July from 31 May (MEED 13:5:10).

Larsen & Toubro emerged as the frontrunner for the deal after submitting the lowest price in a bid round on 2 March. Their price beat rival proposals from South Korea’s Hanwha and Ireland’s Kentz Overseas.

The other three bidders on the deal were not asked to extend bid bonds.

The winning firm will build a LPG bottling facility at Umm al-Aish, just north of Kuwait City. The site will cover more than 150,000 square metres and includes six storage tanks, pumps and compressor stations and truck loading facilities. The three production lines in the filling hall are each capable of filling 1,600 12-kilogramme cylinders every hour.

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