Kuwait revives Jurassic gas projects

28 July 2015

Schemes will be fast-tracked to make up for lost production in the Divided Zone

  • One Jurassic field development project is due to be tendered before the end of the year
  • A $1.56bn Jurassic gas scheme was awarded to the local Kharafi National in 2010
  • The project stalled due to problems securing financing

Kuwait is reviving plans to develop its Jurassic gas fields as it scrambles to make up for lost production in the Divided Zone, where production dropped to zero over the first half of 2015.

Upstream operator Kuwait Oil Company (KOC) is planning to tender one field development project before the end of the year, and another is due to be tendered in the first half of 2016, according to two sources close to KOC. A request for expressions of interest (EOI) has already been faxed to contractors with regard to the first field development project.

A $1.56bn scheme to develop reserves in the Jurassic gas fields located in the country’s north was awarded to the local Kharafi National in 2010. The project aimed to produce 100,000 barrels a day (b/d) of wet sour crude and up to 510 million cubic feet a day (cf/d) of gas, along with a sulphur granulation plant. It used a build-operate-transfer (BOT) contracting model, where the contractor would provide the financing for the construction.

After appointing Italy’s Saipem as subcontractor in 2011, then replacing it with the UK’s Petrofac in 2012, the project stalled when Kharafi National failed to secure the financing it needed to proceed with the scheme.

The new Jurassic gas projects due to be tendered over the next 12 months will also use the BOT contracting model, according to industry sources. The resurrection of plans to develop Kuwait’s northern Jurassic gas fields comes after an ongoing dispute with Saudi Arabia over land use in the Divided Zone, which is shared by the two countries.

Amid the ongoing dispute, output in the region fell to zero in the first half of 2015, down from about 500,000 b/d in 2014. As well as attempting to boost hydrocarbons production in the north of Kuwait, KOC is also looking to develop offshore reserves to try and make up for the drop in production in the Divided Zone.

Stay informed with the latest in the Middle East
Download the MEED app today, available on Apple and Android devices

You might also like...

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications