Qatargas has delayed the award of a $1bn contract for its gas recovery project at Ras Laffan Industrial City after postponing an internal board meeting to approve the deal.

The state-controlled liquefied natural gas (LNG) producer delayed the meeting to approve the deal until 20 December from the original 5 December date, according to a source close to the deal.

“The board meeting will discuss the financing behind the project and is also likely to approve the winner,” says the source.

The US’ Foster Wheeler and Fluor Corporation are the two frontrunners to pick up the deal.

Other interested companies include KBR and Stone & Webster, both of the US; France’s Technip; and Italy’s Tecnimont.

Qatargas retendered the engineering, procurement and construction (EPC) contract in the second quarter of 2009, with the aim of benefiting from lower construction costs throughout the Gulf for oil and gas projects because of the global economic downturn.

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

The facility will collect vapours, known as ‘jetty boil-off gas’, created during the production of LNG and reduce the amount of gas that Qatargas has to flare.

The winning contractor will provide compressors and supporting utilities.

Qatargas plans to increase its LNG production to 42 million tonnes a year (t/y) in 2010, from 25 million t/y currently. The jetty boil-off project will produce an estimated 800,000 t/y of gas.

Qatar Petroleum owns 65 per cent of Qatargas.