KNPC awarded five construction contracts for the 615,000-barrel-a-day (b/d) refinery in 2008, but cancelled the deals in March 2009 after Kuwaiti politicians attacked the state-owned refiner’s handling of the tendering process.
Contractors and senior oil executives in Kuwait tell MEED that KNPC will have finalised plans for a second bid round before the end of June 2010.
KNPC has attempted to simplify the contracts to minimise the opportunity for opposition politicians to attack the project.
It awarded the original contracts on a cost-reimbursable basis, meaning the contractors would bill KNPC for all the expenses they incurred while working on the contracts.
In the new bid round, KNPC will award the deals as lump-sum turnkey contracts, under which the client pays a set fee for each contract.
KNPC, a subsidiary of national oil company Kuwait Petroleum Corporation, will now tender eight contracts rather than the five it awarded two years ago, dividing the workload to make the contracts more manageable for individual firms.
A second change from the 2008 bid round is that KNPC will invite competing bids for each of the contracts. In 2008, it awarded one of the five contracts after holding negotiations with only a single contractor.
“They are making it as hard as possible for people to com-plain about it,” says one senior KNPC executive.
There has yet to be a final resolution between contractors and KNPC over the problems that led to the cancellation of the deals from the 2008 bid round.
South Korean contractors say KNPC has yet to respond to their compensation claims after the refiner cancelled their awards.
The KNPC executive says the company will decide whether to compensate the South Korean firms, which won most of the five construction contracts, by the end of November or early December.