Fluor Wins Kashagan Construction Project
|Tuesday, October 11, 2005
Fluor Corporation says that a Fluor-led joint venture known as North Caspian Constructors (NCC) has been awarded the onshore construction of Kashagan Experimental Program facilities by Agip KCO, a company wholly owned by Eni through Agip Caspian Sea B.V., the single Operator of the appraisal and development operations in the Kazakhstan sector of the North Caspian Sea(1). Value of the contract to Fluor was not disclosed and was booked in the company's second quarter.
Kashagan is the largest oil field discovered in the North Caspian Sea PSA contract area. It is located offshore, about 80 kilometers from Atyrau and extends over a surface of approximately 75 kilometers by 45 kilometers. Kashagan is one of the largest oil fields discovered over the last 30 years. Development of Kashagan represents one of the greatest current challenges of the petroleum industry given the following characteristics: deep, high-pressure reservoir; high (16-20%) sulphur content with associated production of hydrogen sulfide; shallow waters that range from 3 to 4 meters and freeze from November to March and sea-level fluctuation during the rest of the year; wide temperature variations from -30C to +40C and a very sensitive environment with a variety of internationally protected species of fauna and flora.
The NCC joint venture also consists of Tekfen Insaat ve Tesisat and Gama Endustri Tesisleri Imalat Ve Montaj of Turkey and Bateman Eurasia Oil and Gas Company from the Netherlands.
The team will provide management of the onshore construction effort and self-performance of all in-country construction activities for the Onshore Processing Facility, located at Eskene West near Atyrau, which will comprise final oil stabilization and gas processing facilities incorporating sulphur recovery to produce export quality oil and gas as well as elemental sulphur. Construction is due to commence in October 2005 with completion scheduled for September 2008. At peak, more than 9,000 people will be working on the project in Kazakhstan. The project presents a number of construction challenges due to severe weather conditions which will require planning to maximize available weather windows. The location of the onshore plants also provides significant logistical challenges.
The project is the first increment of what will be a multistage program. Full Field Development (FFD) refers to the second and third development phases of Kashagan that will follow the successful completion of the Experimental Program. It is currently envisaged that during the FFD production will be increased from 450,000 bopd to 900,000 bopd at the end of the second phase and to the plateau of 1.2 million bopd by the end of the third phase.
"We are extremely pleased to be awarded this important construction contract," said Jeff Faulk, Fluor's group president of Energy & Chemicals. "We appreciate the confidence that Agip KCO has demonstrated in us, and we look forward to working with our joint venture partners in achieving our client's goals on this challenging project."