Kuwait unveils Al-Zour shortlist

(Getty Images)

State refiner Kuwait National Petroleum (KNPC) on Saturday announced firms pre-qualifying for the construction of the Gulf Arab state's planned 615,000 barrels per day (bpd) Al-Zour refinery.

KNPC said last week Kuwait had approved a budget of about $14 billion for the construction of the refinery, the Middle East's biggest, more than twice an initial cost estimate.

The tender was split into several construction packages, according to a KNPC statement published in local daily Al-Qabas.

The first package - NRP/EPC-0031 - includes the construction of crude distillation units, sulphur removal and units to treat naphta, kerosene and diesel.

The firms that have pre-qualified to bid for the tender include a consortium of Italy's Snamprogetti and South Korea's Hyundai Engineering & Construction, a consortium of Japan's JGC and Korea's GS Engineering & Construction, and a consortium of Technip Italy, Foster & Wheeler and Korea's SK Engineering & Construction.

The second package - NRP/EPC-0032 - encompasses the construction of hydrogen production and recovery, sulphur industrialisation, and units to treat diesel.

Firms Snamprogetti, GS Engineering & Construction, WGI Middle East, SK Engineering & Construction, and Petrofac International has all been shortlisted for this tender, as well as a consortium of Technip Italy & Foster Wheeler Energy, and a consortium of Hyundai Engineering & Construction and Daelim Industrial.

The third package - NRP/EPC-0034 - involves the construction of tank storages.

Daelim Industrial, GS Engineering & Construction, SK Engineering & Construction, Petrofac International, Hyundai Heavy Industries, Hyundai Engineering & Construction, Italy's Saipem, South Korea's Daewoo Engineering & Construction, Singapore's Rotary Engineering, and a consortium of CB & I and CBI Eastern Anstalt have all pre-qualified to bid for this tender.

The fourth package - NRP/EPC-0035 - is for the construction of Marine export facilities.

For this tender Saipem, Hyundai Engineering & Construction, Hyundai Heavy Industries, Archirodon Construction overseas, and Gulf Leighton have all been shortlisted.

KNPC had also invited bids for a package to provide steam generation, water systems and other infrastructure for the processing units at the Al-Zour refinery.

An industry source told Reuters in August the state refiner was in talks with US firm Flour, which already holds the project management contract for the refinery.

KNPC said last week the final tenders would be launched in the fourth quarter. It plans to start operating the refinery at the end of the first quarter of 2012 after initially targeting a launch in end-2010.

Kuwait cancelled a first tender for the refinery in February, after bids came in far above its initial budget. Local media said some bids had reached as much as $15 billion.

The world's seventh-largest oil exporter plans to boost refining capacity to 1.415 million bpd from 930,000 bpd with the new plant and upgrades its Mina Abdullah and Mina Ahmadi refineries.

The new Al-Zour refinery is to replace the ageing 200,000-bpd Shuaiba refinery, which has been hit by several accidents.

At 615,000 bpd, Al-Zour would exceed the capacity of the Middle East's largest refinery, Saudi Arabia's 550,000-bpd Ras Tanura plant. Saudi Arabia plans to build another 400,000 bpd refinery in Ras Tanura.

OPEC-member Kuwait has around 10% of the world's oil reserves. It produced 2.41 million bpd of crude in August, a Reuters survey showed.

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