• Supreme Petroleum Council is charged with oversight of Kuwait’s energy sector
  • Approval paves the way for contract awards worth $13.4bn
  • It has come days after Kuwait Petroleum Corporation gave the scheme the green light

Kuwait’s Supreme Petroleum Council (SPC), the government agency charged with oversight of the country’s energy sector, has approved the expansion of the budget of the Al-Zour New Refinery Project (NRP), paving the way for contract awards worth $13.4bn.

Approval from the SPC has come days after the board of Kuwait Petroleum Corporation (KPC) gave its approval for KD871m ($2.87bn) in extra funds for the project.

The decision was reported by Kuwait’s state-controlled news agency Kuna on 16 July.

In the wake of the decision, officials employed by state-controlled downstream operator Kuwait National Petroleum Company (KNPC) worked through the weekend preparing documents connected to the NRP, according to sources cloose to the scheme.

Speaking on 21 July, the CEO of KNPC, Mohammad al-Mutairi, said his organisation is moving ahead with the NRP as planned.

His comments were made during a visit to Kuwait’s Mina Abdullah, Mina al-Ahmadi and Shuaiba refineries.

The approvals from the KPC board and the SPC come 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.

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.

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