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National Grid selects teams for £500m jobs

NEWS - Six contractors win schemes for upgrading UK's high-pressure gas transmission system

NATIONAL Grid has picked contractors for a raft of major pipeline projects across the UK worth almost £500 million in total.

The schemes have an estimated construction value of £200 million.

They form a key part of National Grid's plans to upgrade the UK's high-pressure gas transmission system, as the company estimates that demand will increase by 2 per cent a year until 2014.

All the contractors on NGT's Tier 1 list for major projects have gained at least one contract, except German outfit PPS.

Entrepose has claimed the biggest single project up for grabs, the 62 km Asselby to Pannal scheme in Yorkshire.

Murphy ? which has just begun work on a key tunnelling deal for London's Olympics ? has landed two contracts, while Laing O'Rourke has also sealed a brace of schemes.

Amec rejoined the high-pressure pipeline market after pulling out of the sector in 2002 complaining of high risks and low margins and has been rewarded with the Isle of Grain reinforcement project in Kent.

The successful companies now have more than a year and half to carry out design work and ecological and archaeological surveys before construction work begins in 2008.

New rules introduced by the DTI and gas regulator Ofgem mean that contractors must complete a full 12month survey before schemes are given approval.

A source at one winner said: 'We submitted initial bids ? profits and overheads ? and we have been told that we are preferred bidders for the pre-construction phase and at the end of that we will come up with a final price for the jobs.

'These firms are very likely to be awarded the construction phase of the scheme, although this will not be an absolute formality because, if the price comes out too high for National Grid's liking, they might go back to the market.'