South Korean firm tenders Iraq gas processing facility

20 February 2013

First major construction tender at Akkas gas field

Korea Gas Corporation (Kogas) has prequalified at least five firms for a major engineering, procurement and construction (EPC) deal at the Akkas field in the restive Anbar province of western Iraq.

The tender, issued in the middle of January marks the first major move towards development at the field by the South Korean gas firm, which was awarded a technical service agreement in late 2011.

According to sources close to the project, Kogas has prequalified at least four South Korean EPC firms to bid for the construction of a 160 million cubic feet a day (cf/d) gas processing facility.

They are: Hyundai Heavy Industries; GS Engineering & Construction; Daewoo Engineering; Samsung Engineering; and STX Industries.

However, it is unclear when the firms are due to submit their bids. A site visit, planned for February was postponed due to “local security problems”, one source close to the project told MEED, adding “No new date has been announced, so nobody knows how the tender will proceed”.

The development has suffered from several setbacks, in particular, the signing faced severe delays due to opposition from the local authorities in Al-Anbar province, who were unhappy with the consortium’s plans.

According to industry sources, under the terms of Kogas’ contract, surplus gas from the field could be transported by pipeline to Syria where it would be processed at the Deir al-Zour gas processing plant. The oil ministries of Iraq and Syria signed an agreement in March covering gas supplies from the Akkas field, but it is unclear if this will still be possible given Syria’s ongoing conflict.

Kogas holds a 75 per cent stake in the Akkas development project, with Iraq’s North Oil Company holding the remaining 25 per cent. The company plans to invest almost $2.7bn over a 20-year period to produce a peak of 400 million cf/d.

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