Kuwait delays Mina al-Ahmadi refinery deal deadline

25 November 2009

Contractors want more time to prepare bids

State refiner Kuwait National Petroleum Company (KNPC) has delayed the bid deadline for a contract to build a $700m gas-fractionating column at the company’s Mina al-Ahmadi refinery by more than a month after calls from contractors for more time to prepare their bids.

KNPC originally set a bid deadline of 13 December for the major engineering, procurement and construction (EPC) deal, but has set a new deadline of 31 January 2010, according to contractors hoping to bid on the scheme.

“On a project like this, we normally need at least five months to prepare,” says the business development manager at one firm looking at the deal. “There simply was not enough time to get the proposals ready.”

KNPC announced in September it would retender a contract to build a fourth gas-fractionation facility at the plant, about 45 kilometres south of Kuwait City. A gas fractionation is a device that separates gas into its different chemical components (MEED 25:9:09).

The state refiner awarded the contract to South Korea’s SK Engineering & Construction in December 2007 after a competitive bid round, but KNPC then cancelled the contract in early 2008 after it failed to reach an agreement with SK on the size of the contractor’s profit from the deal.

The state refiner will use the facility to process associated gas generated as a by-product of oil production from fields in the north and southeast of the country

Although Kuwait needs to increase the production of gas for power and as feedstock for petrochemicals, it now flares much of what it produces.

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