Contractors are now expecting state-owned upstream operator Kuwait Oil Company (KOC) to retender part of its $3.6bn Jurassic Gas Facility project by the end of the first quarter of 2018.

“KOC has signalled to contractors that one package of the project is expected to be tendered around March,” said one source close to the project.

The terms and conditions of the contract have been altered significantly, according to the source.

Relaunch

KOC is planning to relaunch the project under an early production facility contract, not an engineering, procurement and construction (EPC) deal.

Kuwait’s early production facility contracts are similar to build-operate-transfer (BOT) deals, which allow the main contractor to recover costs by operating the facility before it is transferred to a public company.

The exact scope and value of the package that will be tendered first is not known.

“It’s not yet clear how much the first package is going to be worth,” said the source. “it could be scaled down from the original proposals.”

Earlier this month, the country’s Central Agency for Public Tenders published its decision to cancel the tender of the first phase of the Jurassic gas facility scheme in the minutes from a meeting that was held on 30 October.

The first tender process was cancelled in November this year.

The tenders authority said the cancellation was “as per the guidance of the board of directors of Kuwait Petroleum Corporation (KPC) and the result of a review and amendments to capital budgets for KOC projects.”

Three consortiums were preparing to bid on the scheme:

• SK Engineering & Construction (South Korea)/Petrofac (UK)
• Samsung Engineering (South Korea)/Larsen & Toubro (India)
• Saipem (Italy)/Tecnicas Reunidas (Spain)

The project’s scope included a central processing facility (CPF), offsite facilities and a pipeline gathering system.

The CPF was due to have the capacity to process 590 million cubic feet a day (cf/d) of gas. It would have been able to process 220,000 barrels a day (b/d) of oil and 1,200 tonnes a day of sulphur.

The scheme was being developed to meet Kuwait’s growing gas demand and its cancellation could well be a setback to government plans to produce more than 4 billion cf/d of natural gas by 2030, primarily to meet power generation requirements.

Kuwait currently burns a large volume of oil products to meet its utility needs.

In December 2016, KOC awarded the US-based Black & Veatch a licensing technology and related services contract for sulphur recovery and acid gas removal units to support natural gas processing at the first phase of the Jurassic natural gas facility.

Prior to the cancellation of the tender, the first phase was scheduled to be completed in 2021.