India’s Larsen & Toubro has won a contract covering the EPC of Jurassic crude oil storage facilities and upgrades to Kuwait Oil Company’s existing export network
State-owned upstream operator Kuwait Oil Company (KOC) has awarded India’s Larsen & Toubro (L&T) a contract for the engineering, procurement and construction (EPC) of crude oil storage facilities and upgrades to its existing export network.
The contract for the JLO export facilities and the upgrading of the existing export network project is valued at KD303.5m (about $979.2m), according to information published by Kuwait’s Central Agency for Public Tenders (Capt).
Capt said on its website that the contract was officially awarded to L&T on 15 July.
MEED reported in June that Capt had approved the award and said at the time that a formal award was expected within a month, following talks between KOC and L&T to finalise contract details.
Only two companies submitted bids for the contract in October last year:
- L&T (India): KD303.5m ($988m)
- Petrofac (UK): KD310.6m ($1.01bn)
Following bid submission, Kuwait Petroleum Corporation (KPC) – KOC’s parent company – discussed the potential cancellation of the tender due to bids coming in significantly over budget and Petrofac becoming ineligible to win contracts in Kuwait.
The contractor was temporarily barred from participating in tenders in Kuwait’s oil and gas sector in December last year.
Petrofac received the ban after the company announced it had applied to appoint administrators, a move that potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.
Despite discussions about cancelling the tender, KPC ultimately decided to proceed with the award process because it considered the project a high priority.
One source earlier told MEED: “Around the same time, projects worth around $8bn were cancelled because of bids coming in over budget, but this one has gone ahead because KPC sees it as an essential project.”
The project was originally tendered in November 2024, with a bid deadline of 1 December the same year. The bid deadline was extended several times before bids were ultimately submitted.
Kuwait’s oil and gas sector is in turmoil as a result of the ongoing regional conflict that started on 28 February when the US and Israel attacked Iran.
Amid the ongoing conflict, Kuwait’s Finance Ministry has stopped publishing its monthly report detailing oil export revenues.
While no official figures are available, many experts say the country failed to export crude oil in April and May.
This is likely to have a severe impact on the country’s economy, which relies on oil exports for approximately 90% of government revenues.
