State-owned Kuwait Petroleum Corporation (
KPC is planning to set up a new company to manage the integration of the two facilities, according to the chief executive of KPC, Nizar al-Adsani, who spoke to the state news agency KUNA.
The new company will also manage the integration of a liquefied natural gas (LNG) terminal that is slated to be built in the Al-Zour area, according to Al-Adsani.
Al-Adsanis comments come after months of uncertainty over whether a petrochemical facility would be integrated with the Al-Zour New Refinery Project.
Kuwaiti revived plans for Olefins 3, a multibillion-dollar petrochemicals plant in the Al-Zour area, in October 2014 when UK-based consultancy KBC Advanced Technologies was hired to carry out an initial feasibility study for the scheme.
This feasibility study saw a series of delays over 2015.
For a long time it was uncertain whether KPC would commit to building the new facility and integrating it with the refinery, said one industry source.
The latest announcement is a positive signal. It looks like KPC is ready to proceed with the petrochemical project and it will be integrated with the Al-Zour refinery.
The petrochemical project is estimated to be worth between $5bn and $10bn.
Al-Adsani did not give details on the timeframe or budget for the petrochemicals project.
In 2011, PIC said the Olefins 3 cracker would use a mixed feed of gas and liquids.
Under the original plans, the complex was slated to produce 1.4 million tonnes a year (t/y) of ethylene, 450,000 t/y of linear low density polyethylene and high density polyethylene, along with 600,000 t/y of glycols.
These figures are now out of date and the mix of products produced is likely to be changed in light of the feasibility study being carried out by KBC, according to sources close to the project.
During the bidding stage of the Al-Zour New Refinery Project contractors were warned by state downstream operator Kuwait National Petroleum Company (
The Al-Zour New Refinery Project will see a 615,000 barrel-a-day (b/d) facility constructed in the Al-Zour area near Kuwaits border with Saudi Arabia.
Contracts for the projects five packages were signed in October 2015. The contracts were worth $13bn.
A consortium of South Koreas Hyundai Engineering and Hyundai Engineering & Construction (E&C) is low bidder on KNPCs planned liquefied natural gas (LNG) import terminal, which will also be managed by the new KPC company.
The LNG import terminal will be integrated with the Al-Zour Refinerys marine facilities, which include a docking area for boats.