KNPC eyes 615,000 b/d Kuwaiti refinery for 2012

Sept. 27, 2007
Kuwait National Petroleum Co.'s board has allocated a budget of 4 billion (KWD) for a 615,000 b/d refinery it intends to construct, according to state media.

Eric Watkins
Senior Correspondent

LOS ANGELES, Sept. 27 -- Kuwait National Petroleum Co.'s (KNPC) board has allocated a budget of 4 billion (KWD) for a 615,000 b/d refinery it intends to construct, according to state media.

Official KUNA news agency quoted KNPC Chairman and Managing Director Sami Al-Rushaid as saying that the budget allocated for its construction was based on "accurate estimates."

KNPC initially tendered the giant refinery with a budget of $6.3 billion, but was forced to withdraw the tender in February 2006 after the lowest bid came in at $15 billion.

Al-Rushaid said the new contract will be based on a cost-plus profit margin, which means Kuwait will pay the cost of the project to the successful bidder plus an agreed profit.

Al-Rushaid said KNPC would soon announce qualified bidders, stressing that the technical and financial aspects would be the two main criteria of selection.

Construction is due to start in 12-18 months, with the refinery to come on stream by the end of first quarter 2012. Completion was originally planned for 2010.

KNPC also plans to modernize two of its three existing refineries, one at Al-Ahmadi and the other at Mina Abdullah, taking their combined capacity to 800,000 b/d from their current 700,000 b/d.

When those two projects are finished, KNPC will close down the country's third refinery, at Shuaiba, which has a capacity of 200,000 b/d. The net result will give Kuwait a refining capacity of 1.4 million b/d by 2012.

Contact Eric Watkins at [email protected].