Saipem and Essar bid low on Al-Zour Refinery package four

09 December 2014

Consortium submits a price of $1.4bn

State-owned downstream operator, Kuwait National Petroleum Company (KNPC), has announced that a consortium consisting of Italy’s Saipem and India’s Essar submitted the lowest bid for package four of the Al-Zour New Refinery Project.

Its bid of KD406m ($1.4bn) came in KD96m lower than the second-lowest bid, submitted by South Korea’s Daelim.

The full bidder list is:

  • Saipem (Italy) and Essar (India), KD406,905,688
  • Daelim (South Korea), KD503,437,332
  • Daewoo (South Korea), KD560,825,709
  • Petrofac (UK) and Hyundai Heavy Industries (South Korea), KD623,319,246

South Korea’s GS Engineering and Construction prequalified for the contract, but did not submit a bid.

Package four was tendered on 13 April with an original bid submission deadline of 9 September. This was ultimately pushed back to 7 December.

The package consists of storage tanking, piping and underground works for the planned refinery, which will be built on the Kuwaiti side of the Divided Zone that lies between the borders of Saudi Arabia and Kuwait.

The bid deadline for packages 1, 2 and 3 is 13 January 2015.

Earlier in September, KNPC said it had pushed back the deadlines for bids for the first three packages of the Al-Zour refinery project, after prequalified companies asked for more time.

The bid deadline for the marine package, known as package five, is 6 January. KNPC recently pushed back the date for bid submission from 7 December.

The new refinery is key to Kuwait’s hopes of meeting growing power demand. The 615,000 barrel-a-day (b/d) facility will supply 225,000 b/d of low-sulphur fuel oil for power generation. The scheme will be one of the largest single-phase refineries ever built.

The scheme has been tendered twice before, only to be awarded and cancelled before construction could begin.

Package four of the Al-Zour Refinery includes the construction of:

  • Five floating-roof tanks
  • 28 fixed-roof tanks
  • two dry slop tanks
  • two wet slop tanks
  • A plant fuel oil tank
  • A continuous flushing oil tank
  • An intermittent flushing oil tank
  • Four crude pipelines
  • Two imported fuel gas lines
  • Three low-sulphur fuel oil pipelines
  • A new liquid petroleum gas line
  • A new low-sulphur diesel line

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