Qatargas to start talks over Ras Laffan gas deal

22 January 2010

Contractors expect $1bn award in early February

Qatar Liquefied Gas Company (Qatargas) is to hold negotiations with three international engineering firms over a $1bn-plus deal at the company’s Ras Laffan production facilities in late January.

Four international consortiums submitted bids for the project, known as the plateau maintenance project, on 25 October 2009. Qatargas plans to try cut the price of their bids and to agree on the scope of the liquefied natural gas (LNG) project.

The bidding groups were France’s Technip and Japan’s Chiyoda Corporation; JGC with South Korea’s GS Engineering & Construction; Italy’s Saipem; and Japan’s Toyo Engineering Corporation in a consortium with South Korea’s Hyundai Engineering & Construction.

The consortiums led by Technip and JGC were seen as the frontrunners to win the contracts after bids were submitted, according to sources involved in the scheme at the time (MEED 02:12:09).

However, Qatargas has since held talks with the Toyo-led consortium as well as the Technip and JGC groups, and will start direct negotiations with all three in the last week of January, according to senior executives close to the scheme.

The client wants to go over the technical details of each contractor’s proposal, and to try and force down the prices they are offering. A winner is expected to emerge in early February.

The successful bidder will help Qatargas maintain its LNG output at its Qatargas I facility, located in Ras Laffan Industrial City in the north of the country, at 10 million tonnes a year until 2030.

The engineering, procurement and construction contract is expected to last three years and four months. 

The work includes drilling four new wells and completing two existing wells in the Khuff 4 reservoir, upgrading the offshore facilities to process the extra gas, and constructing a new sulphur unit to handle the extra sulphur storage.

A pipeline linking the Qatargas I and Qatargas II projects has also allowed the company to reduce flaring and recover 400 million cubic feet a day (cf/d) of gas to use for production at Qatargas I.

The Technip-Chiyoda team carried out the front-end engineering and design (Feed) contract for the project in the first half of 2009.

Qatargas I is a joint venture of Qatar Petroleum, with a 65 per cent stake, the US’ ExxonMobil Corporation and France’s Total, each with 10 per cent stakes, and two Japanese firms, Mitsui & Company and Marubeni Corporation, which each hold 7.5 per cent.

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