OPERATOR SEEKS EXPERTISE
Kuwait Oil Company (KOC) is seeking an international consultant for a three year management consultancy contract to assist its management support group(MSG). The state upstream operator has given international companies until 12 December to submit bids for the contract, which includes advising on the preparation of new projects.
Under the terms of the premium management consultancy services contract, the selected company will conduct independent analysis and advice on developing KOC strategy and re-engineering its business processes. The consultant will also evaluate and advise on the development of KOC’s organizational structures and provision of corporate governance. The contract covers training of MSG personnel and introducing international best practices that will be implemented on a call-on, call-off basis.
In 2003-2004, KOC signed two multi-million-dollar in-house project management consultancies with the US’ Flour Corporation and the UK’s Amec to assist with its development plans. The move has been widely viewed as a success, with the upstream investment programme progressing relatively smoothly compared with others in the state. The involvement of international companies is also seen as key to KOC adopting more innovative contracting strategies, which have included the tendering of engineering, procurement and construction management contracts for the first time, and the launch of an enhanced lump sum turnkey contract. Bid evaluation will take about two months, with an award due in the first quarter of 2007.
REVIEW STALLS SUBIYA WORK
The Subiya power plant is the first casualty of Energy Minister Sheikh Ali Al-Jarrah Al-Sabah’s review of the state’s power and water strategy. The 1,500-MW project, due to have been built by a US/ South Korean group of GE Energy and Hyundai Heavy Industries (HHI), has been put on hold while the ministry considers ways to make projects more attractive to bidders.
A spate of power and water shortages in the summer which exposed under capacity prompted the review. Only two of the six major projects in the sector over the past 18 months-including the Subiya scheme- have managed to attract more than one bidder, and non more than two. Following the lead set by the local hydrocarbons sector, the ministry will look at altering contract terms to make projects more attractive o contractors. Options under consideration include reduced contractor risk, material cost escalation clauses an payment of second and third lowest bidders.
The GE/HHI group was selected in August for the gas-fired Subiya plant after submitting a low bid of KD 232 million($800 million), beating off competition from a German/Korean venture of Siemens and Doosan Heavy Industries & Construction. However, its bid bond is understood to have expired on the contract, and sources close to the project say that the scheme is unlikely to go ahead in it current form.
The project will need to proceed eventually. Kuwait Oil Company recently issued a tender for the construction of the gas-oil pipeline to provide fuel feedstock for the plant.
TEN LOCAL FIRMS INVITED TO BID FOR SUBIYA WATER TANKS
The Ministry of Energy(Electricity & Water) has invited 10 local contractors to submit bids by 24 December for a contract to build three new water tanks at the Subiya water transmission system which will distribute potable wter from the Subiya desalination complex to Kuwait City.
The estimated $100 million C1, phase 2 package covers the construction of three concrete water storage tanks each with a capacity of 55 million gallons. The work also includes site preparation, the construction of access roads, related infrastructure and landscaping.
The consultant on the water distribution programme is Binnie & Partners(Overseas), part of the UK’s Binnie Black & Veatch.
TAP OPENED ON WATER WORKS
The Ministry of Energy (Electricity & Water) has invited 14 local contractors to submit bids for a major water distribution contract between the Doha west power and desalination plant and he Doha water storage and distribution complex nearby. Evaluation of bids will take about three months, with an award due by the end of the first quarter.
The scope of works on the estimated $100 million contract covers he construction and maintenance of a 1.2-meter-diameter ductile iron water pipeline between the Doha west desalination complex n the Doha water distribution facility. It also includes upgrade works to the Doha west pumping station and the upgrade an rehabilitation of the Doha storage and distribution complex.
The tender is the third major water distribution contract to be issued for bid in recent weeks. Twelve local contractors are prequalified for the third-phase package to install a 59-kilometer-long water pipeline between Mutlaa al-Aali and West Funaitees, while a similar number of companies re invited to bid for a contract to build three new water storage tanks at Subiya.
MITSUI GROUP BIDS LOW FOR SHUAIBA NORTH
The group led by Japan’s Mitsui & Company is low bidder for the contract to build the Shuaiba north power and desalination plant, south of Kuwait City, following the submission of technical and commercial bids on 19 November. The client, the ministry of Energy (Electricity & Water), will take three-four months evaluating bids before making an award.
Mitsui’s bid of at KD 378 million ($1,303 million) submitted y the only other bidder. South Korea’s Doosan Heavy Industries & Construction. However, there are understood to be considerable differences in power and water export capacities between the two bids, which will be a major determining factor in contractor selection.
The original tender documents called for the construction of a gas fired combined cycle plant, with a capacity of about 500 MW, and 60 million gallons a day of multi stage flash desalination capacity on a lupsum engineering, procurement and construction (EPC) basis.
On the Mitsui bid, Italy’s Fisia Italiampianti is the nominated dealination contractor with South Korea’s Hyundai Engineering & Construction Company carrying out the civils portion and the US’ GE Energy supplying the turbine. Doosan’s bid is supported by Germany’s Siemens, which will supply its turbines for the power plant.
The state struggles o attract EPC contractors to bid for work. Shuaiba north is only the second major power and water contract to have received more than one bid in the past two years.
NEW PIPELINE WORK TERMS OUT
State upstream operator Kuwait Oil Company (KOC) has invited 34-international contractors to submit bids by 16 January for the contract to install the gas-oil fuel pipeline between the Mina al-Ahmadi refinery and the planned Subiya power plant.An award is due by the end of May.
The 13-month contract covers the installation of a 180 Km long, 20 inch diameter pipeline to supply gas-oil fuel for the proposed Subiya power station, north of Kuwait City. The scheme also includes the construction of a substation and control room at the refinery.
Front-end engineering and design and procurement is being carried out by Australia’s WorleyParsons.
In what is understood to be a first for KOC, the tender documents state that the second and third lowest bidders will be compensated for the cost of their bid submission. Kuwait has found it increasingly hard to attract international EPC contractors to its energy sector in recent years, and the move is intended to make the contractors’ market more competitive.
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