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Libya seeks insurance for $9bn gas project

13 April 2023

Mellitah Oil & Gas Company (MOG), a joint venture of Italian energy major Eni and Libya’s National Oil Corporation (NOC), has invited insurance companies to pre-qualify to bid to provide insurance for its planned Mellitah complex integrated expansion project.

The invitation to prequalify is one of several tender documents relating to the project released recently, increasing contractors' confidence that the scheme will make significant progress this year.

In its statement inviting companies to prequalify, MOG said it is seeking a “construction all risks (CAR) insurance policy for the project.

This type of insurance, also called contract works insurance or construction insurance, is a non-standard insurance policy that covers accidental physical loss or damage to a property insured during the construction period.

Usually, the policy will cover any loss or damage to the property and materials other than certain specific exclusions.

The deadline for submitting pre-qualification documents is 10 May 2023, according to the statement issued by MOG.

In January, NOC announced a partnership with Italy’s Eni for the project, which involves the development of two regions containing expected gas reserves of 6 trillion cubic feet with an estimated production capacity of 750 million cubic feet of gas per day (scf/d) for 25 years.

The deal was signed by the NOC chairman Farhat Ben Gdara and ENI chairman Claudio Descalzi.

The Italian oil and gas company said the agreement would generate between $7bn and $9bn of investment into the country’s oil and gas industry. It also said it would generate up to $13bn in net revenues for the state.

The deal was signed in Tripoli during a visit by Italy’s Prime Minister Giorgia Meloni, and it seeks to boost Libya’s gas output using offshore gas fields.

Since the deal was signed, there has been significant tendering activity by MOG.

On 12 April, the company invited contractors to pre-qualify for a project to replace the launching and receiving traps at a gas line at the Aby-Attifel Field. This invitation has a deadline of 27 April 2023.

On 5 April, MOG invited contractors to pre-qualify for a project to repair a breakwater for the company’s tugboats. This invitation has a deadline of 20 April 2023.

On 23 March, MOG invited companies to pre-qualify to provide certification and verification services and marine warranty surveyor services for Structures A and E, Mellitah Complex Expansion, and the Carbon Dioxide Management Integrated Development Project.

The deadline for submitting pre-qualification documents for this tender is 24 April 2023.

Commenting on the recent statements by MOG, one industry source said: “It is very encouraging to see tendering activity increasing at MOG.

“It sends a signal to stakeholders that this strategic project is going to make progress.”

In November last year, MEED revealed that the prequalification process for bidders on the main packages of the planned Mellitah complex integrated expansion project had been completed. The front-end engineering and design (feed) was completed in early 2022.

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Wil Crisp

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