State upstream operator Kuwait Oil Company (KOC) is set to launch a major new tender worth about $7bn for the construction of heavy crude production facilities in the north of the country.

KOC hopes to issue the Lower Fars heavy oil development tender in October, but the deal may not be seen until the end of 2013, according to sources close to the project.

The company has already selected a project management consultant (PMC), but is not expected to make an announcement regarding the winning firm until the tender is launched. The PMC will carry out the detailed engineering for the scheme, as well as technical support during the procurement, construction and commissioning of the facilities.

Five main engineering, procurement and construction (EPC) packages will be up for bid, covering a steam injection facility, production support complex, tank farms and a 270,000 barrels-a-day (b/d) pipeline to transport the heavy crude to the planned new refinery in the south of Kuwait.

The Lower Fars development is a landmark scheme in the region for its use of the cyclic steam stimulation (CSS) method to produce heavy oil, where steam will be injected into the reservoir to heat highly viscous oil, making it easier to pump to the surface.

Pilot trials with the technique are already in place and KOC expects to increase production to 60,000 b/d by 2017.

KOC signed a preliminary agreement in 2007 with US oil major ExxonMobil for the development of Lower Fars, a reservoir in the giant Ratqa field along Kuwait’s northern border with Iraq. Under the deal, which has now been abandoned, the pair aimed to lift output to as much as 700,000 b/d.

This target has now been significantly scaled back, with KOC planning to ramp up production to 120,000 b/d by 2020, and as much as 270,000 b/d by 2030.