Pipelines feeding Kuwait's new refinery project face delays

24 January 2017

Kuwaiti government is probing allegations of corruption among contractors

Project to construct feed pipelines at Kuwait Oil Company’s (KOC) New Refinery Project is facing delays, according to sources close ot the project.

The project could face delays as Kuwait’s Council of Ministers is probing allegations of corruption among contractors who bid on the project. MEED reported earlier in January that UAE-based Dodsal Group had emerged as the lowest bidder of the project, submitting a bid of KD265m ($868m).

About ten members of parliament have voiced opposition against awarding the project to Dodsal. They allege poor performance and delays on previously awarded projects.

MP Abdulwahab al-Babtain confirmed the MPs’ opposition to the project. He also confirmed to MEED that KOC had communicated a request to re-tender the project, and added “we are looking at the right way to solve the problem”.

The matter, according to another source has been escalated to the Supreme Petroleum Council. In an article in Kuwaiti daily Kathima, former oil minister Adel Khalid al-Sabeeh alleged that there was “clear collusion between the first and second bidders on the project”.

An executive with Dodsal, who declined to be named for the article denied the company was involved in any collusion.

The construction of the 250-kilometre pipeline to supply crude to the 615,000 barrel-a-day Al-Zour refinery was tendered in 2014. India’s Larsen & Toubro submitted the lowest bid of KD230 million ($753m), however withdrew from the project citing the failure of its local partner Joint Scientific Group to extend its bank guarantee.

KOC had requested a re-tendering of the project in 2014, however Kuwait’s Central Tenders Committee (CTC) rejected the request leaving the next lowest bidders Dodsal as well as Petrofac in running for the project.

In January, the CTC website indicated that Dodsal had been chosen as the lowest bidder to execute the project. An executive with the engineering firm had earlier told MEED that the possibility of a re-tender had been ruled out.

A KOC tendering department executive in charge of the project said he had not received any indication as to the status of the project or whether it is likely to be re-tendered.

Dodsal had previously been awarded KOC’s effluent water and injection plant in North Kuwait, worth an estimated $946m as well as the $809m gathering centre 31 in northern Kuwait. The water injection plant, is set for completion in June 2018, while the gathering centre is set to be completed by July 2017, according to MEED Projects.

Al-Sabeeh alleges in his article that the gathering centre project had been delayed by 15 months, while the water injection plant had been delayed by seven months, resulting in collective losses exceeding $2bn. 


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