Petrofac group in front for $4bn Algerian gas plant deal

13 July 2008
A consortium of UAE-based Petrofac International and Indonesia’s Inti Karya Persada Tehnik (IKPT) has been provisionally selected for the contract to build the new 4.3-million-tonne-a-year liquefied natural gas (LNG) plant at Arzew following the public opening of commercial bids on 12 July.

The consortium’s offer of AD241.1 trillion ($3.92bn) is some 16 per cent lower than the next best price of AD281.8 trillion ($4.6bn) submitted by an Italian/ Japanese joint venture of Snamprogetti and Chioyda Corporation. Paris-based Technip is the only other bidder with an offer of AD366.3 trillion ($6bn). A fourth technical bidder, the US’ KBR, declined to submit a price (MEED 23:5:08).

The bids themselves are evaluated on an engineering, procurement and construction (EPC) cost per tonne basis. On that measure, the Petrofac/IKPT offer is AD55,000 a tonne, compared with the AD61,000-a-tonne and AD75,000-a-tonne offers submitted respectively by the Snamprogetti/Chiyoda grouping and Technip.

The Petrofac/ IKPT team has 10 days to provide guarantees for its offer. The client, state energy company Sonatrach, says the lump-sum, fixed-price contract will be awarded to the second-ranked bidding group if the deadline is not met. Either way, the contract will be one of the largest EPC deals ever awarded in the region.

The 50-month contract covers the construction of the LNG train using technology licensed from the US’ Air Products & Chemicals (APCI). It also involves the construction of an export pier and three storage tanks for propane, butane and gasoline. Sontrach will finance the total cost of the project.

The Arzew scheme originally formed the downstream portion of the multi-billion-dollar Gassi Touil integrated LNG project. However, the acrimonious departure of the development’s Spanish partners, Repsol and Gas Natural, late last year meant it is now being developed as a standalone facility, using gas sourced from the Gassi Touil and Rhourde Nouss fields (MEED 26:3:08).

Gassi Touil’s upstream element, comprising a new gas processing plant, is also being developed independently by Sonatrach (MEED 15:2:08).

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