Kuwait awards $10bn Al-Zour refinery contracts

12 May 2008

State refinery operator Kuwait National Petroleum Company (KNPC) has confirmed the long-awaited award of the five main packages on its planned 615,000-barrel-a-day grassroots refinery at Al-Zour.

Four of the five main engineering, procurement and construction contracts have gone to South Korean firms in deals worth more than $10bn (MEED 18:4:08).

A consortium of Japan's JGC Corporation and South Korea's GS Engineering & Construction has won the largest contract on the refinery scheme, covering the installation of six distillation and atmospheric residue desulphurisation units and diesel, naphtha and kerosene hydrotreating plants. The package is understood to be worth about $4bn.

SK Engineering & Construction, also of South Korea, has won the contract for the project's hydrogen plants, as well as compression and sulphur recovery units, with a bid of just over $2bn.

Another Korean firm, Daelim Industrial Company, has been selected for a $1.2bn package, which involves the construction of storage tanks.

Its compatriot Hyundai Engineering & Construction has won the marine works package, worth $1.1bn.

The US’ Fluor Corporation has been awarded the estimated $2bn offsites and utilities contract. Unlike the other packages, the contract was directly negotiated with KNPC.

Because each of the contracts is being awarded on a cost-reimbursable basis, the final value of each package will not be known until the work is almost complete. The facility, the largest single-phase refinery project ever built, is due to come on stream in 2012.

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