Refining overhaul gets under way

02 May 2013

Progress on the first of Kuwait’s refining megaprojects is gaining momentum after year of delay

Almost a year ago, Kuwait took the first step in its plans to overhaul its refining industry, inviting international firms to prequalify for two giant schemes, worth more than $30bn.

Kuwait National Petroleum Company (KNPC) has now issued tenders for its Clean Fuels Project (CFP) to the seven consortiums, which will bid for an estimated $16bn-worth of work.

The project involves a major upgrade and expansion of the Mina al-Ahmadi and Mina Abdullah refineries to increase their combined capacity to 800,000 barrels a day (b/d) from 736,000 b/d currently.

Kuwait has been falling behind its neighbours and increasingly locked out of lucrative international advanced fuels markets, something the CFP is intended to remedy.

By the middle of November, bids will be submitted for the CFP’s three main packages. The whole process will be overseen by the Central Tenders Committee, so details on pricing and frontrunners could emerge before the end of the year if there are no delays.

First announced in 2007, the CFP was not approved by the government until the middle of 2011. The project has suffered extensive delays, hit by bureaucracy and the increasingly tense relationship between the government and parliament.

But the project now appears to moving forward. The US’ Foster Wheeler was appointed in December as the scheme’s project management consultant. Other projects that will support the CFP are also moving ahead. KNPC will have to work hard to maintain the momentum, if this critical scheme is to make it off the drawing board.

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