Egyptian Orascom Construction Industries (OCI) has announced that it has been awarded a US$280 million contract for construction work on the El Merk Central Processing Facility (CPF) in Algeria.
The $3.8 billonn El-Merk oil and gas production hub will be located in Block 208, 250 km south east of Hassi Messaoud in the Algerian Sahara Desert.
The El Merk CPF will serve as a production hub for the region, processing hydrocarbons initially from Block 208, operated by Groupement Berkine, an Algerian entity that is co-managed by state-owned enrgy company Sonatrach and US-based Anadarko, the unitised EMK field located on a portion of both Block 208 and the Sonatrach/ConocoPhillips operated Block 405a.
OCI, in a 50/50 joint venture with Bentini of Italy, signed a $230 million contract directly with Groupement Berkine for the CPF’s ‘Base de Vie’ and Industrial Base facility. The package, let on a design-and-build basis, includes all necessary infrastructure and buildings for the CPF.
In addition, OCI signed a $170 million contract with Petrofac International LLC, who were awarded the principal EPC contract for the El Merk CPF last month, for civil and structural steel works on the facility.
The required steel structures and platforms will be supplied by National Steel Fabrication (NSF), a subsidiary of OCI, from their production plants in both Egypt and Algeria.
The contracts will take approximately 30 months to complete and are scheduled for completion during Q4 2011.
The project, one of the largest in Algeria, was put on hold in March 2008 because of a drop in forecast oil output and tensions between the developers, Sonatrach and Anadarko. The project has been relaunched in March 2009.
The development includes a central processing facility, export pipelines and facilities infrastructure. It was originally meant to have a production capacity of 108,000 bpd of crude oil, 55,000 bpd of condensate, and 75,000 bpd of liquefied petroleum gas.
Hydrocarbons for the plant were to come from Algeria’s oil exploration and production concessions Block 208, operated by Sonatrach and Anadarko, Block 212, operated by Sonatrach and Italy’s Eni, and Block 405, operated by Sonatrach and Burlington from the US. Block 208 covers the El-Merk North, El-Merk East, El-Merk and El-Kheit Et Tesseka fields, and is to be the main site for the project.
Five EPC packages were tendered for the project in 2007, with each projected to last for 24 months. Bidders on the first package, for export pipeline construction, were Saipem, Bonatti and Techint, all Italian, the US’ Bechtel, and a consortium of the US’ Willbros Group and Saudi Arabia’s National Contracting Company (NCC). Bidders for the two utilities and offsites packages included Saipem, Italian/Algerian ABB Sarpi, France’s Entrepose Engineering, Techint, Bonatti, and the Willbros/NCC consortium.
Bidders for a fourth civil works package included a consortium of Bentini and Egypt’s Orascom, Lebanon’s Butec, Athens-based Consolidated Contractors International Company, and the local Inerga.
Two final packages, both for central processing facilities, attracted bids from firms including the UK’s Petrofac International, Canada’s SNC Lavalin, Bechtel, Saipem, and Japan’s JGC Corporation.
A project management consultancy contract was also due to be tendered, but was put on hold along with the construction works.
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