State oil company Kuwait Petroleum Corporation (KPC) has signed a memorandum of understanding (MoU) with Export-Import Bank of Korea (Korea Eximbank) agreeing $5bn in financing for oil projects.

A portion of the $5bn will be used to fund packages of Kuwait National Petroleum Company’s (KNPC) Clean Fuels Project with the remainder being used to fund upcoming contracts if South Korean contractors win, according to a statement released by Korea Eximbank.

A breakdown showing how much of the financing will go to the Clean Fuels Project has not been released.

First announced in 2007, the Clean Fuels Project will see two of Kuwait’s three existing refineries upgraded through the addition of new desulphurisation, hydrocracking and kerosene hydrotreating units.

Under current plans, the CFP will increase refining capacity at the Mina al-Ahmadi and Mina Abdullah refineries to 800,000 barrels a day (b/d) from 730,000 b/d, while retiring the older 200,000-b/d Shuaiba refinery and significantly reducing sulphur content in products.

A total of three CFP engineering procurement and construction (EPC) contracts were awarded on 15 April 2014 worth $12bn:

• The $3.8bn Mina Abdullah package one, which was won by a joint venture of Petrofac (UK), Samsung Engineering (South Korea) and CB&I Lummus (US)
• The $3.4bn Mina Abdullah package two, which was won by a joint venture of Daewoo Engineering & Construction (South Korea), Hyundai Heavy Industries (South Korea), and Fluor (US)
• The $4.8bn Mina al-Ahmadi package, which was won by a joint venture of GS Engineering & Construction (South Korea), SK Engineering & Construction (South Korea), and JGC Corporation (Japan).

All three of the of the consortiums that have won work on the Clean Fuels project include South Korean companies.

On top of the main contract awards other, smaller packages on the project have also been awarded to South Korean companies.

Samsung C&T is carrying out the $136m preparatory works contract, which is currently being finalised.

Daelim is expected to complete a $177m contract to fast-track the revamp and reliability of the fluid catalytic cracking (FCC) and the sour water treatment (SWT) units at the refineries by the end of 2015.