The local office of the US Schlumberger has submitted the lowest bid for three contracts, totalling more than $4.3bn, on the second phase of Kuwaits non-associated gas production programme.
The Saudi Arabian Al-Khorayef Group and the local Spetco International Petroleum Company were the two other companies to bid the work, which involves the production of about 120,000 barrels a day (b/d) of wet crude and more than 300 million cubic feet a day (cf/d) of sour gas from the Raudhatain, Sabriya, Northeast Raudhatain, Umm Niqa and Dhabi fields in north Kuwait.
Kuwait gas projects 2015
Schlumberger submitted an offer of KD421m ($1.4bn) each for the identical West Raudhatain and East Raudhatain packages and KD475m for the Umm Niqa and Sabriya package. Al-Khorayef bid KD523m and KD592m for the same three packages respectively, while Spetco offered KD489m and KD615m.
As the client, Kuwait Oil Company (KOC), stipulated that contractors could win no more than one of the three packages, it is likely that all three companies will win one package each.
Each contract involves the build and five-year operations and maintenance of gas-oil separation and treatment systems, export pipelines, effluent water treatment facilities and vapour gas recovery compression systems. The Umm Niqa package also has a sulphur recovery unit, which accounts for its higher cost.
A total of 19 engineering, procurement and construction (EPC) contractors were prequalified to bid for the project. However, it is understood that the move to award the scheme on build-operate model rather than an EPC basis put off many potential bidders.
The US Fluor Corporation conducted the projects front-end engineering and design (FEED).
The $1.56bn first-phase to develop reserves in the Jurassic gas fields was awarded to the local Kharafi National in 2010. The project aimed to produce 100,000 b/d of wet sour crude and up to 510 million cf/d of gas, along with a sulphur granulation plant. It used a build-operate-transfer (BOT) contracting model, where the contractor would provide the financing for the construction.
After appointing Italys Saipem as subcontractor in 2011, then replacing it with the UKs Petrofac in 2012, the project stalled when Kharafi National failed to secure the financing it needed to proceed with the scheme.