Engineering, procurement and construction (EPC) contractor Larsen & Toubro is the low bidder for a Kuwait Oil Company (KOC) contract to install crude oil feedstock pipelines as part of Kuwaits $15bn New Refinery Project (NRP).
The Indian contractor, which partnered with the local Joint Scientific Group, submitted a bid of about $814m for the contract. The scope of work involves the construction of about 250 kilometres of crude oil feedstock pipelines that will serve the planned 615,00 barrel-a-day (bd) greenfield refinery at Al-Zour in southern Kuwait.
The next lowest bidder was Dodsal, also of India, who submitted a bid of $922m.
The full bidders list is:
- Larsen & Toubro (India) with a bid of $814m
- Dodsal (India) $922m
- Saipem (Italy) $946m
- Daelim (South Korea) $959m
- Petrofac (UK) $1.03bn
The NRP is one of the most important and controversial projects in Kuwait.
The output from the countrys three existing refineries do not meet the changing requirements of the established markets in Europe and North America. The government, through national refining company Kuwaiti National Petroleum Company (KNPC), is pushing the NRP to modernise the countrys refined oil products output to meet the more stringent environmental requirements of its major markets.
However, the two huge projects have been stalled for years by government opposition blocs in parliament, who want greater scrutiny in the procurement and decision-making process.
KNPC first released plans to build the Al-Zour refinery in May 2008, but the project has suffered repeated delays.
Construction was cancelled in March 2008 due to political opposition, then two years later the decision was reversed and the project was given the green light. KNPC now expects the project to be completed in 2017.
Prequalified consortiums have until late October to submit technical and commercial bids for the first three packages of the project.
The packages are estimated to be worth about $9bn.
KNPC has ruled that each consortium is capable of executing two of the three packages.