Kuwait approves extra $2.6bn for Al-Zour refinery.

The NEW REFINERY PROJECT  (NRP)

Kuwait has approved an additional 800 million dinars ($2.6 billion dollars) for the budget of the planned Al-Zour oil refinery following a sharp rise in the value of submitted bids, according to a Kuwaiti oil official.

“We have obtained final approval from the board for the additional funds in the budget of Al-Zour project,” Mohammed Ghazi Al Mutairi, CEO of the state-owned Kuwait National Petroleum Company (KNPC), told Kuwait’s Arabic language daily ‘Al Seyassah’.

He said the increase pushed up the refining project’s total investment to between 4.6-4.8 billion dinars (14.95-15.5 billion dollars).

He said the remaining packages of the project, involving one of the world’s largest refineries, would be awarded after funds are approved by the Supreme Petroleum Council.

Al Mutairi said seven companies in the world have the resources to “execute and operate” such giant refining projects, adding that all those firms have bidden for projects in Kuwait, including Al-Zour refinery in South Kuwait.

[tbpspa]

Early this year, KNPC said it set the budget of four billion dinars (14 billion US dollars) for Al-Zour in 2006 and attributed the surge in costs to a sharp increase in building material prices, as well as contracting and construction costs.

In a recent report, Kuwait’s Arabic language daily ‘Al Anba’ said Spain’s TR group and the US Fluor Corp have submitted the lowest bids for Al-Zour’s two main contracts.

It said TR (Técnicas Reunidas) submitted a bid of 1.7 billion dinars (5.85 billion US dollars) for package 1 while Fluor made a bid of 1.2 billion dinars (4.14 billion US dollars) for packages two and three involving main construction work.

It did not mention the remaining packages but said bidding for most of the contract’s packages had been extended over the past months because of the price rise.

The 615,000-bpd state-of-the-art Al Zour refinery, one of the world’s largest oil refining unit, and the development of the existing two main refineries will double Kuwait’s refining output to nearly 1.4 million bpd within four years.

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