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December 17, 2021updated 27 Dec 2021 4:47am

Kuwait signs $398m Jurassic gas contract

Kuwait Oil Company signed a contract with Spetco worth $398m for the JPF-4 project while the JPF-5 contract was signed with Jereh earlier this month.

By MEED   

State-owned upstream operator Kuwait Oil Company (KOC) has signed a $398m contract for the Jurassic production facilities (JPF) project known as JPF-4 with Spetco.

KOC published pictures of the signing ceremony on its Instagram account on 16 December, after the contract was signed.

The $426m contract for another Jurassic contract, known as JPF-5, was signed with China’s Jereh earlier this month.

In October, MEED reported that Spetco and Jereh had submitted the two lowest bids in the second round of bidding for JPF-4 and JPF-5.

Bids were submitted by four companies on 6 October, according to industry sources.

The facility known as JPF-4 is due to be located close to the Sabriyah field in the north of Kuwait. JPF-5 will be less than 10 kilometres to the east of JPF-4.

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Both facilities will conduct testing, processing, treating and handling of wet and sour hydrocarbon well fluids from several oil and gas fields.

These include Raudhatain, Sabriyah, Northwest Raudhatain, Umm-Niqa, Dhabi, Bahra and the fields of Marrat and Najmah-Sarjelu, and other formations in the Jurassic fields.

Both projects are onshore surface production facilities and will be implemented on a build-own-operate (BOO) basis by a contractor, with an option for KOC to buy them back at a future date.

The facilities are due to be built with the capacity to produce 50,000 barrels a day (b/d) of treated sweet crude (Jurassic light oil with 40°-50° American Petroleum Institute (API) gravity) and 150 million standard cubic feet a day of sweet and dehydrated rich gas.

They will include a produced-water treatment unit, a sulphur recovery unit, and associated utilities and supporting systems.

Bidders have been told that the execution stage of services for each facility will total 780 calendar days.

This includes 720 days for design and engineering, project management, supply and procurement, construction, testing and mechanical completion of each facility.

Under the terms of the contracts, commissioning, stabilisation and successful performance testing of the facility should be completed within 60 calendar days of the mechanical completion of the facility.

The winners of the contracts will then operate and maintain the facilities for five years.

The state upstream operator has already awarded three other Jurassic production facilities contracts.

Kuwait is tapping the Jurassic carbonate reservoirs in the north to meet soaring gas consumption.

KOC started gas production from its Jurassic sour gas field in May 2008 with the commissioning of the upstream project known as early production facility 50.

The Jurassic reservoirs contain a variety of hydrocarbons, ranging from oil to gas condensate with sour gas.

In January this year, MEED revealed that JPF-3 in the West Raudhatain field had been fully commissioned.

KOC awarded the $377m contract for the project to Spetco in July 2016.

In March, Kuwait-based Combined Group Contracting Company (CGCC) announced that it had been awarded a $138.4m contract for external works for Jurassic production facilities in Kuwait’s northern regions.

The external works package relates to work on the JPF-4 and JPF-5 projects in north Kuwait.

In July, KOC removed JPF-6 and JPF-7 from its “approved projects” list, effectively cancelling them.

The cancellation of the projects was due to budget cuts, according to industry sources.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.

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