AL-ZOUR REFINERY PROJECT SET TO BE RETENDERED
The 615,000-barrel-a-day new refinery project at Al-Zour will be retendered, according to the project’s director, Ahmad al-Jemaz.
In the original tender, the lump-sum prices for the four main process packages came in at more than two-and-a-half times the original budget of KD 1,850 million ($6,380 million), with South Korean contractors dominating the bidding.
The decision to cancel the original tender was taken after evaluation by the project management consultant, the US, Fluor Corporation, determined that the bids were inflated. An independent evaluation carried out by another consultant for the client, Kuwait National Petroleum Company (KNPC), confirmed the analysis.
KNPC will be hoping that a new contracting strategy will make the project more attractive to European, US and Japanese firms, which largely stayed clear of the scheme the first time round, and result in more competitive prices.
SHUAIBA WORKS TENDER OUT
Kuwait National Petroleum Company has invited seven local and international contractors to submit bids by 8 April for a contract to carry out modification works at its Shuaiba refinery.
The work covers the rehabilitation of instrumentation and control systems at the facility. The prequalifiers for the estimated KD 10 million ($34.5 million) contract are Consolidated Contractors Company, Heavy Engineering Industries & Shipbuilding Company and National Kharafi, all local, South Korea’s Hyundai Engineering and Construction Company, India’s Larsen & Toubro, UAE based Petrofac International and Toyo Engineering India.
Shuaiba is the country’s smallest and oldest refinery. It was hit by a fire on 17 January, caused by an explosion on a leaking gas pipeline. In November last year, a blast in a heavy oil refining unit shut down operations for a week.
KUWAIT ROAD TENDER CANCELLED
The Ministry Of Public Works is to retender the contract to build a road between Wafra and Kabad.The local Burhan International Construction Company was low bidder at KD 12.8 million ($44 million) for the contract when bids were submitted last summer. The two year contract involves the construction of 56 kilometers of dual-carriage way between the Kabad and Wafra roundabouts. The work will also include street lighting and basic earth works.
KUWAIT ROAD PREQUALS INVITED
The Ministry Of Public Works has invited contractors to submit prequalification applications by 14 April for two major contracts to expand the Jahra and Jamal Abdul Nasser roads in Kuwait City.
The work involves upgrading the roads to improve traffic capacity and flow. The local/US team of Louis Berger International and Pan Arab Consulting Engineers (PACE) is the design consultant on both projects.
SIDDIQ AND AHMADI SUBSTATION WORK RETENDERED.
The Ministry Of Energy (Electricity & Water) has invited seven international contractors to submit bids by 20 March for a retendered contract to build the Siddiq W 300/132-kv substation and expand the existing 132/11-kv-Ahmadi W substation to 300 kV.
The scope of works on the estimated $80 million-100 million contract covers the supply and installation of the two substations over a period of 24 months. The contract was first tendered in October, with a deadline of 21 November. However, it was cancelled due to technical issues. Prior to that the client had tendered the two projects separately.
Europe’s ABB had been the low bidder at KD 19 million ($66 million) when separate bids were submitted for the Siddiq W project. The long-running Ahmadi W job was tendered in early 2000, when six international companies were invited to bid. Both original schemes were cancelled after the client decided to package them together.
AWARDS FLOW FOR DRILLING RIGS
Kuwait Oil Company (KOC) has awarded three five-year contracts, worth more than KD 115 million ($397 million), for the supply and operation of drilling rigs.
The local Burgan Company for well Drilling. Trading & Maintenance has won two of the contracts.
The larger one, worth KD 46.6 million ($160.7million), covers the supply of two 2000-hp rigs. The second, valued at KD 23.6 million ($81 million), is for one 1,500 hp rig. The third contract, worth KD 46.8 million ($161 million), went to Kuwait Drilling Company for the supply of two 2,000-hp rigs.
Last year KOC, the state upstream operator, spent more than $500 million acquiring rigs.
BOOSTER STATION OUT TO BID
Kuwait Oil Company (KOC) has tendered the engineering, procurement and construction contract to build a gas booster tation in the Southeast, as part of plans to increase its gas handling capacity.
A total of 16 International contractors have been prequalified to bid by 14 August for the estimated KD 165 million ($569) contract. It covers the construction of booster station 160, which will have capacity of 250 million cubic feet a day of associated gas produced from the state’s Southeastern oil fields.
KOC wants to significantly reduce flaring of its gas production to less than 1 per cent by 2020, as it uses the gas for downstream industry and power generation requirements.
A tender is about to be issued for the second phase of a project to produce up to 400 million cf/d of non associated gas from the Sabriya field.
MINISTRY ACTS ON POWER DEFICIENCIES
The Ministry Of Energy(Electricity & water) is acting to allay the state’s energy crisis by issuing more tenders for emergency generating capacity for 2008. It is also evaluating bids for a fourth emergency contract for this year.
Nine companies have until 3 April to submit their offers for the supply, installation and commissioning of new simple cycle, gas-fired turbines at two sites by 31 May 2008. the larger of the two contracts involves the installation of 2,500 MW of capacity at Subiya, in the north. The Al-Zour south scheme calls for 800MW.
Bids will be evaluated on the basis of the cost per kilowatt. Given the fast track nature of the contracts and the global shortage of turbines, the contract values are expected to be far higher than if they were awarded in a conventional manner.
The emergency capacity tenders demonstrate the seriousness of the power situation in Kuwait.The state is not expected to have enough generating capacity this summer, despite awarding three major fast track capacity deals.
Three companies Amman-based Foster group and international Trading Holding Company and Alghanim International Contracting & Trading Company, both local, are bidding for a fourth contract after the original tender was cancelled.
OPERATOR REVAMPS CONTRACT TERMS
International Contractors are expected to reconsider business opportunities in Kuwait, after efforts by state upstream operator Kuwait Oil Company (KOC) to make the market more attractive.
KOC has revealed details of its enhanced lump-sum turnkey (LSTK) contract which it plans to use for all future projects. Key changes include contracts which provide for provisional sums where the nature and extend of the work cannot be properly defined at the tender stage. There will also be disputes review board and options to cover commodity and currency price fluctuations.
The new contract is a recognition of what is needed to be done to attract international engineering, procurement and construction contractors to the local hydrocarbons sector, which is dominated by a handful of companies.
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