
Contractors remain sceptical about project announcements, given the country’s delivery record for deals
At last year’s MEED Kuwait projects conference, government officials smothered delegates with plans and details for two of the country’s most eagerly awaited projects. Contractors hoped that the long-delayed schemes would finally start moving. This year, however, there were few grand announcements and fewer contractors to hear them. Those that did appeared distinctly underwhelmed.
The new refinery and clean fuels project, worth an estimated total of $30bn, received final approval in June this year from the Supreme Petroleum Council (SPC), Kuwait’s highest oil sector decision-making body. By the end of the year, state refiner Kuwait National Petroleum Company (KNPC) says it will finalise plans for the schemes. Contractors are not so easily convinced.
“Public officials are here to promote their projects and to gauge interest,” said one delegate. “Contractors are here to show interest and to see if any of this is real.”
They have good reason to be sceptical. The state has had a number of high-profile false starts. KNPC awarded a number of contracts in 2008, but before construction started, the deals were cancelled on SPC’s order. The order was given due to questions in parliament over the manner in which the contracts were awarded.
Confidence and credibility need to be restored, not just in the refining sector. The collapse of the K-Dow deal, a major joint venture with the US’ Dow Chemical in 2008, continues to haunt the petrochemicals sector. As Kuwait looks for a new partner for its planned third olefins cracker scheme, it is unlikely the company will have forgotten this.
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