Al Zour Refinery

The Al Zour Refinery is an oil refinery under planning and development in Kuwait, a member of OPEC. The Kuwait National Petroleum Company (KNPC) first released plans to build what would have been the country's fourth oil refinery in May 2008 but it cancelled construction in March 2008 due to political opposition. Two years later, however, the government has re-approved construction and KNPC anticipates completion around 2017.[1]

Initial plans

The Kuwait National Petroleum Company released plans to construct the refinery in July 2007. In May 2008, it awarded construction contracts; the largest contracted was granted to a consortium of Japan's JGC Corporation and South Korea's GS Engineering & Construction, covering the installation of six distillation and atmospheric residue desulphurisation units, and diesel, naphtha, and kerosene hydrotreating plants. Korea's SK Engineering & Construction was charged with constructing the hydrogen plants, as well as the compression and sulphur recovery units; Daelim Industrial was to construct storage tanks; and Hyundai Engineering and Construction was to be responsible for the marine works. U.S. engineering and construction firm Fluor Corporation was awarded the offsites and utilities contract.[2] KNPC announced that it would be operational in 2012 and that it planned on spending approximately $14 billion on the project.[3] The refinery was expected to have a capacity of 615,000 bbl/d (97,800 m3/d), which would have made it the largest refinery in the Middle East.[4]

Cancellation

However, in March 2009, the Kuwaiti government informed the contractors to halt construction, citing a drop in oil prices. Some investment analysts predicted the project's cancellation as early as December 2008.[5] Furthermore, the project encountered political opposition by lawmakers who claimed that the government had not consulted the Central Tenders Committee before awarding contracts to foreign companies.[6]

Re-approval

However, in June 2011, the Supreme Petroleum Council—Kuwait's oil agency—re-approved construction of the refinery in Al Ahmadi, Kuwait. Construction had been halted due to financial concerns and political wrangling, but the Oil Minister affirmed that Kuwait was indeed moving forward with the refinery that would be able to process 615,000 barrels of oil per day. The estimated cost is $14.5 billion, or 4 billion dinar.[6] As of May 2012 Kuwait's three existing refineries produce 930,000 barrels per day.[1]

The Kuwait National Petroleum Company announced that it would launch a tender in June 2012.[1] The projected timeline aims for completion in 2017; invitations to bid will be issued in Q4 of 2012 and contracts are expected to be awarded in Q4 of 2013.[7] According to the Kuwait News Agency, there are several pre-qualified consultants, including former contractor Fluor, Technip, and AMEC.

References

  1. ↑ 1.0 1.1 1.2 "Kuwait to tender for oil refinery in June-official". Thompson Reuters. 8 May 2012. Retrieved 12 June 2012.
  2. ↑ "KNPC - Al Zour Refinery". Zawya. Retrieved 2008-12-23.
  3. ↑ Ackerman, Ruthie (20 March 2009). "Kuwait Fluor Deal Falls Through". Forbes. Retrieved 12 June 2012.
  4. ↑ "$15bn budget for Al-Zour refinery unchanged". Kuwait Times. 2008-05-13. Retrieved 2008-12-23.
  5. ↑ Daley, Will (20 March 2009). "Fluor Says Kuwait Halts $2.1 Billion in Refinery Work (Update4)". Bloomberg. Retrieved 12 June 2012.
  6. ↑ 6.0 6.1 MacDonald, Fiona (28 June 2011). "Kuwait May Tap Private Investors for $14.5 Billion Refinery". Bloomberg Businessweek. Retrieved 12 June 2012.
  7. ↑ "Projects Monitor: KNPC - Al Zour Refinery - Package 3 (Offsites & Utilities)". Zawya. 7 May 2012. Retrieved 12 June 2012.