Al-Khafji Joint Operations (KJO) has released the tender for the engineering, procurement and construction (EPC) contract for the Hout offshore associated gas facilities in the Neutral Zone between Saudi Arabia and Kuwait.

The project will involve capturing the associated gas from the Hout field that is currently being flared and transporting it to onshore processing facilities for treatment.

The scope of works for the project includes t constructing a replacement flare stack, a 24-inch pipeline to transport the gas to processing facilities onshore as well as demolition works. “This is part of the ongoing set of projects that KJO is putting in place in order to harness the Neutral Zone’s gas,” says a contracting source familiar with the project. “Bids need to be in for 4 August.”

There are several EPC contractors with specialist skills in offshore oil and gas work, who have been prequalified for the project, including:

  • Afcons (India)
  • J Ray McDermott (US)
  • Leighton International (Australia)
  • National Petroleum Construction Company (UAE)
  • Saipem (Italy)

Australia’s WorleyParsons carried out the detailed engineering work for the scheme as part of the five-year engineering services contract it signed with KJO earlier this year.

KJO is responsible for oil operations in the Neutral Zone, an area between Saudi Arabia and Kuwait where the border is not properly defined. The company is a joint venture between Saudi Aramco subsidiary Aramco Gulf Operations and the Kuwait Gulf Oil Company.

The Neutral Zone currently has an oil output of around 600,000 barrels a day (b/d) of oil. Upgrades and expansions to the zone’s fields by KJO will raise production up to 1 million-b/d and process the 60-70 million standard cubic feet a day of gas that is currently flared.

The company currently has a number of other contracts out to tender, including around $600m of tenders for upgrade work at its existing facilities in the Neutral Zone. At least 13 contractors are bidding for at least one of the two contracts available and MEED reported in June that the bid deadline has been extended to August (MEED 17:6:11)