The $800m Kuwait National Petroleum Company (KNPC) project to build a fuel depot for refined products in Matlaa could be facing further delays as the downstream operator focuses on its priority megaprojects.

Sources close to KNPC tell MEED that it appears that the $14bn Clean Fuels Project and the $17bn New Refinery Project are being given priority ahead of the Matlaa depot.

“KNPC is moving very slowly at the moment,” said one source close to the oil company. “Part of the reason for this seems to be the Clean Fuels Project and the New Refinery Project.

The $14bn Clean Fuels project is currently under execution and will expand and overhaul two of Kuwait’s existing refineries.

The $17bn New Refinery Project is also currently under execution. It will see a new refinery built near the town of Al-Zour. Under current plans it will be the biggest refinery in the Middle East.

“Executing these megaprojects is proving to be a considerable drain on KNPC’s limited resources,” says the source.

KNPC, the downstream subsidiary of the country’s national oil company Kuwait Petroleum Corporation (KPC), had been expected to issue an invitation to bid (ITB) for the $800m Matlaa fuel depot project in the third quarter of 2017.

The front end engineering design (feed) for the Local Marketing Depot at Matlaa was completed by Amec Foster Wheeler in 2015.

It was originally expected that the in ITB for the engineering, procurement and construction (EPC) contract would be issued be issued in the first quarter of 2016.

Since then, the project has suffered from significant delays and the ITB is yet to be issued.

KNPC says it is developing the Matlaa fuel depot project to meet growing demand for petroleum products in the local market as well as cutting transportation costs and maintaining strategic stocks in depots as per KPC recommendations.

The Matlaa depot will be Kuwait’s third fuel depot and will serve the north of the country where increased demand is expected due to large housing developments.

Its scope includes cross-country pipelines, new pumping facilities and a storage tanks.

Oil will be pumped to the depot by pipeline before being distributed to petrol stations by fuel tankers.