Qatargas says it has given the initial go ahead for the planned $1bn gas recovery scheme project at Ras Laffan Industrial City.

A contract award for the project, known as the jetty boil-off gas recovery project is expected by the end of March, say sources close to the scheme.

The project has been seen as a race between two US firms; Foster Wheeler and Flour Corporation, with Foster Wheeler considered the frontrunner to win the deal.

Other companies which bid for the deal include Fluor, KBR and Stone & Webster, all of the US; France’s Technip; and Italy’s Tecnimont. Japan’s Chiyoda was prequalified but declined to bid for the project.

When awarded, the winning contractor will provide compressors and supporting utilities.The project will enable boiled-off gas to be collected from liquefied natural gas (LNG) ships and compressed at a central facility, the company said in a statement.

The compressed gas will then be sent to the LNG producers to be consumed as fuel or converted back into LNG. The project is expected to be completed by the end of 2013 or early 2014. When fully operational, the scheme will recover some 600,000 tonnes a year of LNG.

Qatargas was originally expected to award the delayed engineering, procurement and construction contract in January.

The state-controlled LNG producer delayed the project several times in 2009. Qatargas retendered the contract as it sought to benefit from falling construction costs across the Gulf (MEED 16:12:09).

Flour completed the front-end engineering and design (Feed) contract for the project in the first half of 2009.

Qatargas, which is working with Qatar Petroleum and the Ministry of the Environment, aims to significantly reduce overall flaring and emissions at Ras Laffan Industrial City.