Al-Zour package awaiting approval for re-tender

29 April 2015

Decision expected on New Refinery Project package from Kuwait’s Central Tenders Committee in coming weeks

  • Decision to be made on package four of refinery
  • Any new tender would be fast-tracked
  • Planned refinery to be built in the Divided Zone

State-owned downstream operator, Kuwait National Petroleum Corporation (KNPC) has submitted an application to re-tender package four of the Al-Zour New Refinery Project and is waiting for approval from Kuwait’s Central Tenders Committee (CTC).

CTC is expected to make a decision on the re-tender at some point over the next few weeks, according to a source close to the project.

“This is expected to be a fast-track re-tendering process with minimal changes to the scope,” said the source.

Package four consists of storage tanking, piping and underground works for the planned refinery, which will be built on the Kuwaiti side of the Divided Zone that lies between the borders of Saudi Arabia and Kuwait.

The request to re-tender package four comes after bids for the project’s five unawarded packages all came in over budget, requiring billions in extra funding.

The low bid for package four was submitted by a consortium of Saipem (Italy) and Essar (India), a just under KD407m ($1.35bn), $236m over KNPC’s budget of $1.1bn

The original bidders list on the project were:

  • Saipem (Italy) and Essar (India), KD406,905,688
  • Daelim (South Korea), KD503,437,332
  • Daewoo (South Korea), KD560,825,709
  • Petrofac (UK) and Hyundai Heavy Industries (South Korea), KD623,319,246

KNPC is yet to decide on whether or not package five will be re-tendered, according to the source.

The low bid of $1.55bn for package five was submitted by a consortium made up of South Korea’s Hyundai E&C, Italy’s Saipem, and India’s Essar. This figure is more than twice the $850m budgeted for the package.

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