Deadline extended on $400m Neutral Zone contract

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The al-Khafji Joint Operations Company (KJO), a joint venture between Saudi Arabia and Kuwait, has announced that contractors wanting to bid for the US$400 million tender to expand water facilities at the al-Khafji oilfield now have two extra months in which to do so.

News agency Reuters reported that the contract, which includes the upgrade of an existing water treatment facility as well as the construction of a new onshore water treatment plant, will be open to bids from interested parties until December 7 2009.

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"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,” one contractor is reported as saying.

“The main purpose of the water treatment facility is to respond to the targeted oil production," he added.

The al-Khafji oilfield is located in the Neutral Zone between Saudi Arabia and Kuwait and has a current capacity of 550,000 barrels per day (bpd). KJO want to increase this figure to 700,000-900,000 bpd by 2030.

KJO is owned by Saudi Aramco subsidiary Aramco Gulf Operations and Kuwait Gulf Oil Co.

A senior official from Chevron, who operate the Saudi side of the Neutral Zone, was recently featured in ArabianOilandGas.com talking about the steam flooding techniques the company employs in the area to extract oil.