South Korean contractors Hyundai Heavy Industries (HHI) and Samsung Engineering have emerged as the two frontrunners to win an estimated $4bn offshore deal in Abu Dhabi, according to three companies bidding on the contract.

Five commercial bids were submitted on 17 September for the second major package of early production facilities at the Upper Zakum field, known as the EPC-2 package.

The engineering, procurement and construction (EPC) contract, part of Zakum Development Company’s (Zadco) plans to increase the field’s capacity to 750,000 barrels a day (b/d) from 500,000 b/d, is expected to be the largest single oil and gas deal in the Middle East this year.

Lead bidders and secondary partners vying for the deal include:

  • Hyundai Heavy Industries (South Korea)/KBR (US)
  • Samsung Engineering (South Korea)
  • Technip (France)/National Petroleum Construction Company (UAE)
  • JGC Corporation (Japan)/Daewoo Engineering & Construction (South Korea)
  • Petrofac (UK)/Daewoo Shipbuilding & Marine Engineering (South Korea)

Companies involved in the process believe the two South Korean groups submitted the lowest-priced proposals, but it is yet to emerge whether HHI or Samsung is the low bidder. A source from Zadco familiar with project refused to comment on the bidding process.

Several contactors submitted technical proposals on the package in early May this year. The scope of the EPC-2 contract includes construction of crude processing trains on four new artificial islands at the Upper Zakum field and several other onshore facilities.

In July, Zadco awarded the $800m EPC-1 first Upper Zakum package – covering the offshore section of the development – to a consortium of Technip and NPCC.

The two main early production facilities contracts cover phase one of the development of Upper Zakum, which is planned to add 100,000 tonnes a year (t/y) to the field’s production capacity by the end of 2015. Packages for the phase two permanent production facilities are expected to be tendered at a later date.

The Upper Zakum field, which Zadco believes is the world’s fourth largest, is located 84 kilometres off the coast of Abu Dhabi.

Zadco is a joint venture of state-owned Abu Dhabi National Oil Company (Adnoc), US oil major ExxonMobil and Japan Oil Development Company (Jodco).