Kuwait Gulf Oil Company (KGOC) has officially issued the tender for the Al-Zour onshore gas plant development. Consequently, the state-owned firm seeks contractors to build critical infrastructure adjacent to the existing Al-Zour refinery. The project carries an estimated budget of $3.3 billion and requires bids by 29 December. Meanwhile, a crucial contractor meeting is scheduled for 14 September to clarify technical requirements. The ambitious facility will process up to 632 million cubic feet of gas daily. Additionally, it will handle 60,000 barrels per day of condensates from the offshore Dorra field.

KGOC issued the tender on 23 August using an accelerated fast-track procurement model. This approach bypasses Kuwait’s Central Agency for Public Tenders, significantly speeding up the award process. This is not the only major oil project being carried on in the Middle East as the Jafurah fourth expansion phase contract has been awarded to L&T. The ambitious project involves building vital onshore gas compression plants in the kingdom’s Eastern Province. Specifically, the work covers gas inlet facilities, condensate handling, and propane refrigeration systems.

Major Contractors Eye Al-Zour Onshore Gas Plant Opportunity

At least seven international engineering firms have expressed strong interest in the Al-Zour onshore gas plant contract. Specifically, Samsung E&A, Larsen & Toubro, and Tecnicas Reunidas attended earlier project discussions. Other contenders include Saipem, Hyundai Engineering & Construction, and JGC from Japan. However, the project faces geopolitical complications surrounding the Dorra field’s ownership. Iran disputes Kuwait and Saudi Arabia’s rights, referring to the reservoir as Arash. Therefore, security concerns could impact offshore operations feeding gas to the onshore processing facility.

Dorra Field Development Advances Despite Regional Tensions

The broader Dorra development comprises four engineering, procurement, and construction packages. Recently, Al-Khafji Joint Operations awarded two major offshore contracts worth approximately $5.2 billion combined. McDermott International secured offshore package 2A valued at $1.5 billion earlier this month. Furthermore, a Larsen & Toubro and Saipem consortium won package 2B, the largest segment at $3.7 billion. These awards followed the 15 August bid validity deadline for offshore work.

Project Overview

• Project Value: $3.3 Billion
• Location: Al-Zour, Kuwait (adjacent to existing refinery)
• Client: Kuwait Gulf Oil Company (KGOC)
• Bid Deadline: 29 December
• Status: Tender issued, contractor meeting scheduled 14 September

Scope

• Onshore gas processing plant development
• Capacity of 632 million cubic feet per day
• Condensate handling facilities (60,000 b/d)
• Processing gas from offshore Dorra field

Highlights

• Fast-track procurement bypassing Central Agency for Public Tenders
• Part of wider $9bn+ Dorra field development program
• Seven major international contractors expressed interest
• Tender issued on 23 August using accelerated model

Key Developments

• Contractor coordination meeting set for 14 September
• Offshore packages 2A and 2B recently awarded
• McDermott secured $1.5bn offshore package 2A
• L&T/Saipem consortium won $3.7bn package 2B

Key Challenges

• Geopolitical disputes with Iran over field ownership
• Security concerns for offshore infrastructure protection
• Processing gas from contested Saudi-Kuwait Neutral Zone
• Coordinating onshore plant with complex offshore operations

Outlook

• Bid submissions due by year-end deadline
• Fast-track process expected to accelerate award timeline
• Project critical to Kuwait’s gas processing capacity expansion
• Award anticipated in early 2027 following evaluation