KOC weighs re-tendering $2.5bn project under new Build-Own-Operate model
Revised contracting strategy under consideration after previous tender was cancelled; new bids could be invited in Q1 2027
The Kuwait Oil Company (KOC) is considering re-tendering a major oil infrastructure project worth approximately $2.5 billion after cancelling the original tender in January, with a revised contracting strategy potentially paving the way for a fresh bidding process in the first quarter of 2027.
According to MEED magazine, citing sources in the oil sector, the project covers the development of the first Separation Gathering Centre (SGC-1) and the first Water Injection Plant (WIP-1). KOC is reportedly considering adopting a Build-Own-Operate (BOO) model instead of the Engineering, Procurement and Construction (EPC) arrangement originally planned.
Under the BOO model, the contractor builds, owns and operates the facility, whereas an EPC contract generally covers engineering, procurement and construction. The proposed change would represent a shift in the project’s contracting approach, although the final strategy has not yet been confirmed.
The sources said the KOC was preparing to approve a revised project budget over the next ‘few days’, potentially allowing the company to invite bids during the first quarter of 2027.
The SGC-1 and WIP-1 development was one of four upstream oil projects with a combined value of approximately $7.73 billion whose tendering procedures were cancelled in January. The cancellations followed bids that exceeded the budgets allocated for the projects.
The lowest bid for the SGC-1 and WIP-1 project was submitted by Spain’s Técnicas Reunidas at $2.47 billion. India’s Larsen & Toubro submitted the lowest bid of $2.48 billion for the development of the third Separation Gathering Centre (SGC-3) and the third Water Injection Plant (WIP-3).
Larsen & Toubro also submitted the lowest bid, valued at $1.30 billion, for the expansion of the two Effluent Water Disposal Plants (EWDP-1 and EWDP-2). Meanwhile, the lowest bid for the fourth Water Injection Plant (WIP-4), at $1.48 billion, came from UK-based Petrofac.
KOC’s reported consideration of a revised budget and alternative contracting model signals a possible route towards reviving the SGC-1 and WIP-1 development. However, the timing of a new tender remains dependent on the approval of the revised budget and confirmation of the company’s contracting plans.
