Fluor Wins EPCM Contract from Tengizchevroil

Fluor Corporation's PFD UK Limited joint venture has been reconfirmed by Tengizchevroil as contractor for engineering, procurement and construction management services for the restarted Second Generation and Sour Gas Injection (SGP/SGI) Projects at the Tengiz and Korolev Fields in Kazakhstan. Partnered with Parsons E&C, the PFD joint venture will manage SGP/SGI project execution with a value of the remaining scope to be executed at an estimated $2.6 billion. The contract value to Fluor is $1.3 billion and is subject to annual budget authorizations by the client.

Located in the western portion of Kazakhstan at the edge of the Caspian Sea, SGP/SGI will increase oil production at Tengiz by approximately 10 million tons per year and will increase gas, LPG, and sulphur sales products by a commensurate amount. Scope of the project will include a new 120-kilometer pipeline to transport additional gas into the existing export pipeline system.

"We are extremely proud to be involved in this major undertaking, which will help provide a foundation for oil and gas supplies to the region and export markets," said Kirk Grimes, group executive of Fluor. "This project is the first of many opportunities in the resource-rich region, and our upstream process and gas treatment expertise, along with our joint venture partner's expertise, provides the PFD team with strong capabilities to meet the objectives of this challenging project."

The PFD team began initial design and engineering work for the project with TCO in the summer of 2000. Initial work for the full EPCM portion of the project is under way, with completion scheduled for mid 2006. More than 1,500 PFD and TCO employees will work on the project in offices located in Camberley, U.K., and in Atyrau and Tengiz, Kazakhstan, as well as other vendor/subcontractor locations around the world.

Tengiz and Korolev field oil production is presently being exported via the Caspian Pipeline Consortium (CPC) route through the 1,500-kilometer oil export pipeline connecting Tengiz to the Russian Black Sea port of Novorossiysk. It is planned for the increased production volumes from SGP/SGI to be transported via the CPC pipeline. Fluor was the engineering, procurement and management services contractor for the CPC pipeline, one of the world's major pipeline projects.

Fluor has previously executed projects at Tengiz. The joint venture's construction plan will take into account the demanding weather conditions, which range between minus 40 degrees Celsius and plus 40 degrees Celsius. The Tengiz Field was discovered in 1979, representing one of the largest oil field discoveries in the world in the past 20 years.

On behalf of TCO, PFD will work closely with Kazakh design institutes and has implemented a procurement/contracting approach focused on providing the Kazakhstan suppliers, equipment providers, and construction contractors the opportunity to participate in this world-class project, according to company officials.


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