We are pleased to announce that ENGlobal was awarded an engineering, procurement, and commissioning services agreement from the Caspian Pipeline Consortium (CPC). Granted under two contracts, one to the Russian Federation and one to the Republic of Kazakhstan, the three-phase award is expected to have a total value of approximately $86 million over four years. As previously announced by CPC, its shareholders agreed to launch the Expansion Project construction on April 19, 2011.
Under the Russian Federation contract, ENGlobal’s scope includes engineering, procuring equipment, buildings, programming, and fabrication of 230 control system panels for eight new pump stations and the upgrade of three existing pump stations, storage facilities, and marine terminal. The contract for Republic of Kazakhstan consists of engineering, procuring equipment, buildings, and fabrication of 78 control system panels for two new and two existing pump stations, start-up and commissioning services for the local control systems and valves.
It is anticipated that ENGlobal will perform the engineering and procurement services in the U.S. on a lump sum basis. On a time-and-material, not-to-exceed basis, ENGlobal will be responsible for the start-up and commissioning of each pump station as well as conduct on-site training on the panels in Russia and Kazakhstan.
As previously announced in 2000, ENGlobal (formerly known as IDS Engineering) supplied, designed, programmed, and integrated programmable control hardware for the design phase of CPC pump stations.
William A. Coskey, Chief Executive Officer of ENGlobal, said: “We are pleased to receive this follow-on award from CPC and we appreciate their continued confidence in our capabilities. Our management and business development teams have been very proactive during the contract review process over the past several months. This includes developing a detailed project plan and accounting for schedules, arranging office accommodations, and staging of the panels and buildings.”
Mr. Coskey continued. “This award from CPC is particularly relevant as we target work internationally. Our Markets strategy is in full swing, including following market trends and, of course, supporting our clients in achieving their objectives. By optimizing our cross-selling opportunities, we believe we will benefit from a key competitive advantage when performing work overseas. In the meantime, we intend to use available personnel and resources, as well as hire additional personnel throughout the CPC project.”
About Caspian Pipeline Consortium
The Caspian Pipeline Consortium (CPC), owned and operated by Governments and international oil and gas companies, is a pipeline that originates in Kazakhstan and routes through Russia. On December 15, 2010, shareholders and governing bodies of CPC announced the unanimous approval of a $5.4 billion expansion of the Caspian pipeline. The capacity of the 900-mile (1500 kn) pipeline, which carries crude oil from Western Kazakhstan to a dedicated terminal in the Black Sea, will increase to 1.4 million barrels per day from its current capacity of 730,000 barrels per day. The expansion of the pipeline is a key step toward the utilization of the Tengiz field, estimated to hold reserves of 6-9 billion barrels of oil. The CPC will carry the Tengiz crude and transport oil from both Kazakhstan and Russia. The project will be implemented in three phases, with capacity increasing gradually from 2012 to 2015. The three largest CPC partners - Transneft, KazMunaiGaz (KMG) and Chevron - will co-manage the project which will involve refurbishments of the existing five pump station, installation of 10 new pumping stations, six new storage tanks and the addition of a third offshore mooring point at the Black Sea terminal.