EXCLUSIVE: Frontrunner emerges for Kuwait New Refinery final package

21 June 2017

Refinery’s final package was retendered in March

Italy’s Saipem is the frontrunner for the final package of Kuwait’s $17bn New Refinery Project (NRP) after submitting the lowest bid of $842m ($256m), according to sources close to the scheme.

State upstream operator Kuwait Oil Company (KOC) retendered the final phase of the project earlier this year after it began probing allegations of corruption among contractors.

South Korea’s SK Engineering and a consortium of Lebanon’s Consolidated Contractors Company (CCC) and Spain’s Tecnicas Reunidas submitted the next lowest bids.

The project, which will provide crude feed-stock and fuel gas from KOC’s South Tank Farm facilities in Ahmadi to Kuwait’s 615,000 barrel-a-day new refinery, has been delayed since it was first tendered in 2014.

The companies that submitted bids on the feed pipelines project are:

  • Saipem $842m
  • SK Engineering $846.7m
  • CCC/Tecnicas Reunidas $855m

The bidding prices for the current tender are close to the lowest bidding price on the previous round of bidding. In January, UAE’s Dodsal Group, which had submitted a bid of $868m was chosen by Kuwait’s Central Tenders Committee as the frontrunner for the project.

Its choice proved contentious as the contractor has been accused of delaying previous work undertaken in the country. KOC eventually moved the country’s Supreme Council of Energy into re-tendering the project.

The tendered package comprises a series of pipelines with a total length of 350 kilometres to supply 615,000 barrels a day of crude and 300 million cubic feet a day of gas feedstock for the New Refinery Project.

Work on the scheme is under way, with feed pipelines package the last to be awarded. Kuwait National Petroleum Company is developing the New Refinery Project, located north of Al-Zour power station, to meet growing demand from the power sector. It is set to produce low sulphur fuel oil by processing heavy crude.

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