Kuwait struggles

The opposition in parliament had been complaining that the contracts were not tendered through the Central Tenders Committee, and the State Audit Bureau is currently investigating the contract awards which oil industry sources say were necessary to be awarded on fast-track basis to get the refinery online.

Kuwait Oil Company (KOC), responsible for the upstream operations in the country, has already extended the deadline to 18 November for receiving bids on a contract for the construction of a pipeline that will connect the Al-Zour refinery to its supply network.

This is the third extension since July when over-loaded contractors asked for more time to bid for the contract.

The Al-Zour refinery project has been kicking around since the late 1990s. It was scheduled to be completed in 2010 but is now expected to come online in 2012. KNPC officials say that they may have no option but to upgrade the 195 000 bpd Shuaiba refinery, which was scheduled to be shut down in 2012 due to its old age and high maintenance costs.

The Al-Zour will be the third-largest standalone refinery in the world after the 1.2mbpd Reliance Industry project in Western India and the 630,000 bpd refinery to be built at Port Arthur in the US by a joint venture of Aramco and the Royal Dutch Shell Group.

Delays in resolution of contract awards and start of construction work on Al-Zour refinery are also likely to impact the estimated $18 billion-$20 billion Clean Fuels Project (CFP) at Mina al-Ahmadi and Mina Abdullah refineries. KNPC has shortlisted the UOP of the US and Axens of France for  the supply of a process licence and design for expanding refining capacity. "KNPC is pushing hard to get things going, but we could see a delay of several months before things start moving," says the consultant.

The CFP project calls for the addition of 64 000 bpd of new capacity at the Mina Abdullah and Mina Al Ahmadi refineries, which currently have combined capacity to refine 736,000 bpd.

Mina Abdullah was set up in 1958 with capacity of 30,000 bpd and has undergone several upgrade and expansion projects to boost design capacity.

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