Yemen invites bids for Ras Issa terminal

25 September 2009

State-run upstream energy firm Sepoc to replace ageing offshore facility on country’s Red Sea coast

Yemen’s state-run upstream oil and gas company Safer Exploration & Production Operations Company (Sepoc) has invited contractors to bid for work on the construction of a new oil terminal at Ras Issa on the country’s Red Sea coast.

When completed, the terminal will take over from the company’s current floating offshore facility, which the company says is ageing and needs to be replaced.

The new facility will have six onshore crude oil storage tanks with a combined capacity of 3.3 million barrels of oil, diesel storage tanks and a piping network.

Sepoc will link the onshore storage units via a sub-sea pipeline with a single point mooring system located about 8 kilometres offshore, allowing larger oil tankers to berth.

Sepco originally set a deadline of 15 September for companies to prequalify for the construction contract, but has pushed back the deadline to 30 September after contractors asked for more time to prepare their documents.

At least eight companies will express interest in the deal, according to a business development executive at one Saudi-based contractor hoping to bid on the project.

The executive says Sepoc has approached contractors including a consortium of Turkey’s Tekfen, the US’ Chemtex and South Korea’s Posco Engineering and Hyundai Heavy Industries; Italy’s Techint; Kuwait’s Metalex Industry; Egypt’s Petrojet and India’s Punj Lloyd.

The Saudi-based contractor expects Sepoc to issue an invitation to bid by the end of 2009 and to set a deadline for the completion of construction works within two years of a contract award.

In November 2006, Pakistan’s Nespak won an engineering consultancy contract on the project, which involved updating an earlier feasibility study, preparing a conceptual design, preparing tender documents for the engineering, procurement and construction deal, and supervising the facility.

The new terminal will handle oil from Yemen’s Marib field, to the east of Sanaa. It is the country’s second-largest oil field and currently produces about 60,000 barrels a day (b/d). Output from Marib has dropped dramatically since 2003 because of natural depletion. In 2003, it contributed 115,000 b/d to the country’s total oil production.

Yemen’s crude output peaked at 457,000 b/d in 2002 but dropped to 305,000 b/d last year, according to UK oil giant BP.

Despite the country’s oil depletion, its gas sector is in good shape. Yemen LNG plans to produce 1.2 billion cubic feet a day (cf/d) of natural gas at its Marib plant before transporting it to a 6.7 million-tonne-a-year (t/y) liquefaction and export terminal at Balhaf in the south of the country via a 322-kilometre-long pipeline.

The company originally planned to start production at the plant in late 2008 or early 2009, but has delayed it until October following a series of minor technical problems.

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