EXCLUSIVE: Kuwait prepares to award final refinery package

19 July 2017

Refinery will have capacity of 615,000 barrels a day when completed

State energy firm Kuwait Oil Company (KOC) is likely to award the final package of the $17bn New Refinery project in August, according to sources close to the project.

MEED reported in June that Italy’s Saipem was the frontrunner for the final package, after submitting the lowest bid of $842m. The final package comprises a series of feed pipelines with a total length of 350 kilometres, which will supply 615,000 b/d of crude oil and 300 million cubic feet a day of gas feedstock for the upcoming refinery.

While the main contracts for the greenfield refinery, which is being built in Al-Zour, were awarded in 2015 and work has been ongoing, the final package, first tendered in 2014, was delayed because of allegations of corruption amongst contractors.

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.

The choice proved contentious as the contractor had been accused of delaying previous work undertaken in the country. KOC advised Kuwait’s Supreme Council of Energy to re-tender the project, and the client invited fresh bids in March this year. Three contractors submitted bids for the deal in June. 

The completion of the feed pipelines that would provide crude feedstock and fuel gas from KOC’s South Tank Farm facilities in Ahmadi to the New Refinery.

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

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

The newly-formed Kuwait Integrated Petrochemicals Industries Company is developing the New Refinery Project, located north of the 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.

Along with the Clean Fuels Project to upgrade Kuwait’s oldest refineries Mina al-Ahmadi and Mina Abdullah, the New Refinery project will boost the Opec producer’s refining capacity from 930,000 b/d to 1.4 million b/d 2020.

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