QP to float Barzan gas recovery tender by June

24 February 2010

Contractors await details of $1.7bn contract

After months of delays, international contractors now expect Qatar Petroleum (QP) to float tenders for the $1.7bn Barzan gas recovery contract by the end of June this year. 

“At least for the gas treatment facility, it will be floated towards the end of the second quarter of 2010,” says a source close to the project.

Although tenders are expected soon, it is not yet clear how the state energy company plans to tender the engineering, procurement and construction (EPC) contract. Phase one of the project could be split into several parts, says one contractor preparing to bid.

Barzan in numbers

  • 1.7 million - Cubic feet a day of gas produced in phase one
  • 2 billion - Cubic feet a day of natural gas produced in phase two
  • 2.5 million - Cubic feet a day of natural gas produced in phase three

Source: MEED

“We are just waiting for the ITB [Invitation to Bid]. I think it would work better as one large contract rather than dividing it into smaller pieces,” the contractor says.

QP invited at least 10 international contractors to express interest in the four engineering, procurement and construction (EPC) deals to build the Barzan facilities at the end of November 2009. The prequalification process is expected to be completed by the end of March, with a final bidding deadline set for June.

Firms expected to bid on the deals include the US’ Foster Wheeler in a consortium with Spain’s Tecnicas Reunidas; South Korea’s Samsung Engineering in a consortium with Japan’s Chiyoda Corporation; Hyundai Engineering & Construction, also of South Korea, with Japan’s Toyo Engineering Corporation; South Korea’s Daelim Industrial Company; Japan’s JGC Corporation; Italy’s Saipem; and France’s Technip.

Chiyoda carried out the front-end engineering and design (Feed) study on the gas facilities.

The project sponsor, also called Barzan, is a joint venture of state-run energy firm QP and the US oil major Exxon-Mobil Corporation.

Contractors expect Barzan to develop the structure in three phases. The first phase will involve the construction of two onshore gas processing trains by the end of 2013, with a combined capacity of 1.7 billion cubic feet a day (cf/d).

Phase two will deliver a further 2 billion cf/d and the third phase will add another 2.5 billion cf/d of gas.

EPC contracts for the development were delayed in 2008 and 2009 as Barzan tried to take advantage of falling costs. Despite repeated delays, most sources are confident the scheme will proceed.

“Barzan is the most important project for Qatar,” says the first source. “In my opinion, it must proceed because without it there is no ExxonMobil/QP petrochemicals complex. Most of the feedstock will come from that field.”

QP and Exxon-Mobil formed a joint venture in March 2009 to build a 1.6 million tonne a year petrochemicals complex at Ras Laffan Industrial City by 2016. The complex is expected to cost more than $2bn.

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