The partners behind a $3bn-plus liquefied natural gas (LNG) development in Libya plan to retender construction contracts for the scheme before the end of 2010, according to sources close to the project.

The UK/Dutch Shell Group, state-owned National Oil Company (NOC) and its subsidiary Sirte Oil Company (SOC) signed an agreement to revamp, upgrade and build additional facilities at NOC’s liquefied natural gas (LNG) production complex at Marsa el-Brega on the Gulf of Sirte in 2008. They had originally announced their plans for the scheme in 2005.

The project calls for maintenance work at the existing LNG plant, work to boost the plant’s capacity if Shell discovers new gas in the country, and a new LNG terminal if sufficient volumes of gas are found.

The plant currently produces about 35,000 barrels of oil equivalent a day (boe/d) of LNG. The partners estimated in 2008 that it would cost $293m to revamp the plant and an additional $350m to boost its capacity to 120,000 boe/d.

Libya gas production 2004-08

The new plant would cost an additional $2-3bn to build, NOC said in 2008.

A number of international engineering firms bid on the engineering, procurement and construction (EPC) deal for the first part of the project in 2009, but the partners decided to let this tender lapse after only one company, the UK’s Petrofac, remained in the running for the deal at the end of the year.

Other bidders included Athens-based Consolidated Contractors Company, the US’ Chicago Bridge & Iron, and a consortium of Greece’s Joannou & Paraskevaides, Italy’s Bonatti and Spain’s Tecnicas Reunidas.

SOC held meetings to discuss the project on 31 March and again on 4 May, and wants to retender the EPC deal before the end of the year, a source close to the company tells MEED.

“That is the plan,” he says. “The details haven’t been sorted out completely yet, but we should have news very soon.”

Contractors with knowledge of the deal tell MEED that they remain unsure of the future of the project, which could be integrated into a wider $54bn government initiative to turn Marsa el-Brega and neighbouring Ras Lanuf into industrial energy hubs (MEED 13:10:10).

“There is nothing going on there right now as far as we know, but something could move later this year,” says one executive at a major engineering firm, which is eyeing up contracts in the country.