KHOBAR, Saudi Arabia, (Reuters) – A joint venture between Saudi Arabia and Kuwait has extended the bidding deadline by over two months for a contract to expand water facilities at the al-Khafji oilfield, the company said.
Khafji, which is in the Neutral Zone between the two countries, has oil capacity of around 550,000 bpd.
Saudi and Kuwait plan to boost capacity to 700,000-900,000 bpd by 2030 in the zone, formed under 1920s treaties to establish regional borders.
Contractors have until Dec. 7 to bid for a new onshore water treatment plant and overhaul an existing plant, the al-Khafji Joint Operations Company (KJO) said on its website.
Firms bidding for another contract to expand offshore oil processing facilities have until Sept. 28 to submit their bids, according to KJO’s website.
The previous deadline for the water facilities was also Sept. 28, but extended as companies needed more time to prepare their bids, contractors said. The contract was worth around $400 million, one contractor said.
“They are now planning to develop oil wells and gas facilities at Khafji…In order to respond to the expansion, they need the infrastructure to support the main process plant. The main purpose of the water treatment facility is to respond to the targeted oil production…,” he said.
KJO is split between Aramco Gulf Operations, a subsidiary of Saudi Aramco, and Kuwait Gulf Oil Co (KGOC). U.S. firm Chevron has the concession to operate on the Saudi side of the zone. Chevron is using new techniques in the zone to boost output of heavy crude in the zone.
In May, KGOC detailed investment plans of around $11 billion in the next 20 years to boost capacity.
Plans include the development of the Dorra gas field with Saudi Arabia. The offshore field, shared also by Iran, has been a bone of contention between Kuwait and Tehran since the 1960s.