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Mon 12 Oct 2015 02:05 PM

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Kuwait's KNPC set to sign contracts for al-Zour refinery

Kuwait's National Petroleum Company plans to sign deals for mega oil refinery on Tuesday

Kuwait's KNPC set to sign contracts for al-Zour refinery
(Photo for illustrative purposes only)

Kuwait's National Petroleum Company (KNPC) plans to sign the main contracts awarded to companies to build the al-Zour oil refinery on Tuesday.

Construction of the 615,000 barrel per day refinery which would be the largest in the Middle East could be a major boost to Kuwait's economy, which has slowed due to political tensions and low oil prices.

"This is an important milestone," CEO of KNPC Mohammed al-Mutairi told Reuters.

Mutairi said commissioning of the refinery was expected to start in November 2019. The project cost is about 4.8 billion Kuwaiti dinars ($15.9 billion), he said, adding that KNPC would not seek any external financing.

Commissioning for Kuwait's Clean Fuel Project is expected to start in April 2018, he said. That project is to upgrade and expand two of Kuwait's largest refineries to focus on producing higher-value products for export, such as diesel and kerosene.

"We are in the final stages for talking with the government corporate financing, the total project cost is around 4 billion dinars," he said.

Mutairi said the company would look to finance 70 percent of the project externally and the other 30 percent would be funded internally through the Kuwait Petroleum Corporation.

Sources had said in April that KNPC was in talks with banks to raise a loan worth around $10 billion for the project.

A tender to build a permanent liquefied natural gas (LNG) import terminal will close in November, with the awarding of contracts for project expected by early 2016, Mutairi said.

The cost of the 3 billion cubic feet per day terminal is about 900 million dinars.

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