South Korea’s GS Engineering & Construction has emerged as the frontrunner for an estimated $550m water injection contract at the Wara oil formation in the southeast of Kuwait after submitting the lowest bid in a 5 April bid round.

The South Korean firm submitted a price of KD151m ($545m) beating rival proposals from six other international engineering and construction firms after two delays from the original 13 March deadline, according to sources close to the project.

Bidding firms include:

• GS Engineering & Construction KD151m ($545m)
• Daelim Corporation (South Korea) KD160m
• Samsung Engineering (South Korea) KD170m
• Petrofac (UK) KD180m
• Hyundai Engineering & Construction (South Korea) KD196m
• Saipem (Italy) KD198m)

Canada’s SNC Lavelin also submitted a bid.

A total of 30 companies were prequalified for the project to provide pressure support for the Wara formation in the Burgan oil field.

The client, state-upstream operator, Kuwait Oil Company (KOC) plans to build water collection, treatment and injection facilities to pump as much as 1 million barrels a day (b/d) of water into the Wara formation to maintain pressure and production levels at the field by the middle of 2014 (MEED 4:3:11).

This will comprise of 10 water treatment units, 60 pumps and up to 700 kilometres of pipelines, with diameters varying from six to 30 inches. It will also include a tank farm with 20 tanks capable of holding between 10,000 to 240,000 barrels.

The greater Burgan area contains about 70 billion barrels of oil making it the second largest oilfield in the world and has been in operation for about 60 years. However, production has fallen to 1.7 million b/d from a peak of 2.4 million b/d in 1972 and without action some analysts believe this could fall to as low as 1.5 million b/d by 2020. In 2009, Kuwait total current production averaged 2.48 million b/d, according to UK oil major BP.