State-refiner, Kuwait National Petroleum Company (KNPC) has finally invited firms to prequalify for more than $30bn-worth of engineering, procurement and construction (EPC) contracts for its two long-delayed projects to expand and overhaul its downstream sector.

KNPC has asked international firms to submit prequalification documents by 14 June for the retendered New Refinery Project (NRP) and the Clean Fuels Project (CFP), as part of its plans to increase refining capacity to 1.4 million barrels a day (b/d) from the current 956,000 b/d.

This will including increasing the capacity to process heavy and sour crude oil to 300,000 b/d from only 24,000 b/d.

The 615,000 b/d refinery project aims to secure the supply of low sulphur fuel oil for electrical power plants. The NRP is divided into five EPC packages: process units, buildings, utilities, tankages and marine facilities. Each package includes detailed engineering, the procurement of materials and equipment, and installation, construction and pre-commissioning based on engineering design documents provided by KNPC.

The initial tender in 2006 was cancelled after bids for the four packages came in well over budget at $16.5bn. The New Refinery scheme was relaunched in 2008, this time with five packages. About $10.3bn-worth of contracts were awarded to various firms in 2008, but were cancelled in 2009 before construction had begun.

Members of the National Assembly, Kuwait’s parliament, complained about the award of the $2.1bn offsites and utilities package to the US’ Fluor, the project manager for the entire scheme, which was negotiated directly, rather than through a competitive tender process. Under pressure to investigate the deal, the Supreme Petroleum Council (SPC), Kuwait’s highest oil sector decision-making body, cancelled all the contracts.

KNPC has also invited interest in three EPC packages for the CFP, a major upgrade and expansion of the Mina Abdulla and Mina Al-Ahmadi refining complexes. Kuwait has been planning to increase its downstream capacity and raise the standards of its export products for more than a decade. The CFP was first announced in 2007, and technology licences awarded in 2008. The project stalled, however, as the NRP came under parliamentary scrutiny.

Both schemes were approved by the SPC in June 2011. They will be tendered on a lump-sum, turn-key basis through the Central Tenders Committee (CTC), which oversees Kuwait’s major contract awards process. It is unclear if contractors will be allowed to bid for both deals.

The prequalification process is expected to take two months to complete. In the meantime, KNPC will chose a project management consultant, who will review the tender documents for the NRP and CFP. Contractors say they expect the tenders to be launched in November at the earliest.

Officials at KNPC have previously told MEED the construction of the NRP will be prioritised given the combined scale of the projects, the logistical challenges and burden on the skilled labour market, Despite both prequalification processes running in parallel, the project management teams for both projects are said to be pushing for their own scheme to be prioritised, as no decision has been made.