McDermott and Daewoo bid low for KJO work

12 January 2012

US and South Korean contractors submit most-competitive bids for offshore and onshore packages in Neutral Zone

The US’ McDermott and South Korea’s Daewoo Engineering & Construction are the lowest bidders for the two main engineering, procurement and construction (EPC) packages for the Saudi Arabia/Kuwait Khafji Joint Operations’ (KJO) $600m upgrade programme.

McDermott is the low bidder for the offshore, while Daewoo is the low bidder for the onshore packages.  

The technical and commercial bids for the EPC packages were opened and evaluated by KJO in the final quarter of 2011 (MEED 2:12:11).

Divided zone bids
Onshore ($m)
Daewoo E&C (South Korea)124.5
ABB (Switzerland)131.4
Technip (France) 142.2
Larson & Toubro (India)156.96
McDermott (US)106.5
Hyundai Heavy Industries (South Korea)176.8
NPCC (UAE)180.88
Source: Khafji Joint Operations

“It has taken a while for any news on this project [to arrive] and even though it is not guaranteed that [the two lowest-bidding contractors] will be given the work, they must both be the favourites to be awarded the contracts.”

The two packages cover onshore and offshore upgrades of the current facilities, including processing the gas that is currently flared. The work is expected to last 36 months, with completion due for the end of 2014. The processed gas will be used by Kuwait when work is complete.

For the onshore package, the scope of works includes the construction of a crude and gas treatment plant, gas and natural gas liquids (NGL) collection and distribution facilities, with associated onshore gas facilities.

The offshore package includes the demolition and replacement of some existing offshore platforms, the laying of a 50km pipeline to the onshore facilities, as well as monitoring stations. 

KJO, McDermott and Daewoo were not available for comment when contacted by MEED.

The work will be the first phase of gas production by the KJO. The company has contracted Australia’s WorleyParsons to conduct a feasibility study for the non-associated Dorra gas field that lies in disputed waters between Kuwait, Iran and Saudi Arabia (MEED 29:7:11).

KJO is responsible for oil operations in the Neutral Zone, an area between Saudi Arabia and Kuwait where the border is not properly defined. The company is a joint venture of Saudi Aramco subsidiary Aramco Gulf Operations and the Kuwait Gulf Oil Company.

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