Kuwait National Petroleum Co (KNPC) awarded 3.48 billion dinars ($11.5 billion) worth of contracts on Tuesday to build the al-Zour oil refinery, which would be one of the largest in the Middle East, Kuwaiti state news agency KUNA reported.
Construction of the 615,000 barrel per day refinery could be a major boost to Kuwait’s economy, which has slowed in recent years by political tensions and is now grappling with a blow to state finances from low oil prices.
The project was originally planned more than a decade ago but has been delayed repeatedly by bureaucratic and political problems, including conflict between Kuwait's parliament and the cabinet.
State-owned KNPC commissioned a consortium including Spain’s Tecnicas Reunidas, China’s Sinopec and South Korea’s Hanwha Engineering and Construction to build the main process units of the refinery, KUNA said. That contract is worth 1.28 billion dinars.
A consortium including Daewoo Engineering and Construction, Hyundai Heavy Industries and Fluor Corp of the United States will build support units and infrastructure services for 1.74 billion dinars.
Another consortium including Hyundai Engineering and Construction, SK Engineering and Construction and Italy’s Saipem was awarded a 454 million dinar contract to build a marine export terminal, KUNA quoted KNPC spokesman Khalid al-Asousi as saying.
Asousi said he expected the last major contract for the project to be awarded in the next two weeks, while signing of all contracts was to take place in early October.
Kuwait’s Supreme Petroleum Council agreed this month to increase al-Zour’s total budget to 4.87 billion dinars from about 4 billion dinars.
Officials have said the refinery is to start up by late 2018 or early 2019, providing low-sulphur fuel to power stations, but it is not clear if that timeframe can still be met.
Oil minister Ali Saleh al-Omair told KUNA this month that there were proposals to build a petrochemical complex alongside the refinery. He did not elaborate.
Kuwait awards $11.5 bln contracts to build al-Zour refinery