No progress on Wafra gathering centre

06 January 2015

Construction stopped in 2014 due to Divided Zone land dispute

All construction and procurement work remains suspended on the $200m project to upgrade the Wafra Main Gathering Centre in the Divided Zone and the upstream operator, Kuwait Gulf Oil Company (KGOC), is yet to give guidance on when the suspension will be lifted, according to an official with knowledge of the project.

The South Korean contractor, SK Engineering and Construction (SKEC), was issued with a suspension note in 2014 by KGOC.

According the official, who asked to remain anonymous, the suspension is due to the ongoing Divided Zone land dispute, which dates back to 2007 when Kuwait outlined plans to build its $14bn Al-Zour refinery on land that included a site that was under lease by Saudi Arabian Chevron.

The dispute has flared up a number of times since 2007 and has seen a significant escalation over recent months according to a number of sources.

In late October, Kuwaiti officials told the Wall Street Journal that Saudi Chevron had been ordered to move out of its offices because of the dispute, and said Kuwait had stopped issuing work permits for Chevron staff.

Insiders also claim the unexpected shutdown of the Al-Khafji offshore fields on 16 October is a result of the rising tensions, though this was denied by Kuwait’s Foreign Ministry Undersecretary Khaled al-Jarallah, in a statement on 26 October.

Before the suspension notice was issued, the project was on course to be completed in September 2015.

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