State-owned downstream operator Kuwait National Petroleum Company (KNPC) is moving ahead with the Al-Zour New Refinery Project (NRP) as planned, according to KNPC CEO Mohammad al-Mutairi.

Al-Mutairi’s comments were made during a visit to Kuwait’s Mina Abdullah, Mina al-Ahmadi and Shuaiba refineries on 21 July, and are likely to further increase optimism that the project will soon see contracts awarded.

His comments come one week after Kuwait’s national oil company, Kuwait Petroleum Corporation (KPC), approved KD871m ($2.87bn) in extra funds for the NRP.

In a meeting on 14 July, KPC board members discussed the Al-Zour refinery and agreed to expand the project’s budget.

The decision comes after extensive delays to the refinery megaproject since bids were announced for the scheme’s process packages in March. The delay was due to low bids for the scheme’s five unawarded packages coming in $3.7bn over budget.

KPC approval was followed by approval from Kuwait’s Supreme Petroleum Council (SPC), the government agency charged with oversight of the country’s energy sector, which met on 16 July.

The Al-Zour scheme is part of a plan to overhaul Kuwait’s refining sector, slash the sulphur content in its fuels and lift its refining capacity from 930,000 barrels a day (b/d) to 1.4 million b/d by 2020.

The project will involve the construction of a 615,000-b/d refinery on a greenfield site in the Divided Zone, which is shared with Saudi Arabia and has a long history of delays and setbacks.

Since it was first announced in 2005, the scheme has been tendered three times. It resulted in contracts being awarded on the second occasion, but they were cancelled before construction was started by the Supreme Petroleum Council.