Top 10 Kuwait infrastructure projects.

1. AL-ZOUR NEW REFINERY PROJECT

Owner: Kuwait National Petroleum Company (KNPC)
Budget: $15bn
Progress: Invitation to bid

The project involves EPC contract to build a new refinery at Al Zour with a capacity of 615,000 b/d, making it the biggest in the region. The contract has been split into five packages with a combined value of over $11bn. Last month, KNPC extended the deadline to bid for packages 1, 2 and 3 by nearly a month from the previous deadline of February 8, 2015 in an attempt to secure lower bids following the sharp decline in global oil prices. For Package 5 (marine package), a consortium comprising South Korea’s Hyundai Engineering & Construction, Italy’s Saipem and India’s Essar submitted the lowest bid of $1.55bn. The contract award is scheduled in May 2015, but it is expected that there may be delays due to the lowest bid coming in at nearly double the estimated budget of $850m.

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2. CLEAN FUELS PROJECT

Owner: Kuwait National Petroleum Company (KNPC)
Budget: $14bn
Progress: EPC awarded

The EPC contract for implementation of Clean Fuels scheme involves upgrading and increasing capacity at Mina Al-Ahmadi and Mina Abdullah refineries raising their total refining capacity to 800,000 b/d. Work has been split into three main packages in terms of process units at Mina Abdullah refinery, revamping the plant together with off-sites and utilities and revamping and installation of units and interfaces at Mina Al-Ahmadi refinery. Last year, a consortium led by Japan’s JGC Corporation won a contract worth $4.82bn to work on the Mina Ahmadi refinery; UK’s Petrofac won a contract worth $3.5bn to carry out work at the Mina Abdullah refinery, while the US-based Fluor Corporation owns another contract for Mina Abdullah valued at $3.4bn. The three consortiums have agreed on a time table with KNPC to complete the project in 45 months.

3. OLEFINS 3 PETROCHEMICALS PLANT PROJECT

Owner: Petrochemical Industries Company (PIC)
Budget: $10bn
Progress: Planning stage

The project involves the development of world-scale Olefins complex in Kuwait with a mixed-feed cracker in Al Zour area to produce 1mtpa of polyethylene and up to 600,000tpa of polypropylene. The economic pre-feasibility study for Olefins III was completed in 2009 while UK-based consultancy KBC Advanced Technologies completed a detailed feasibility study in 2011. PIC is in the early planning stages of developing the cracker and is yet to decide whether or not to go ahead with the integration of this project with the planned $14bn AlZour New Refinery Project (NRP). Start-up is estimated to be in 2017 or 2018, based on current status. Feedstock options being considered include ethane, off gases, propane, and other combinations with LPG, naphtha and condensate.

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4. KUWAIT AIRPORT EXPANSION PROJECT

Owner: Directorate General of Civil Aviation
Budget: $4.8bn
Progress: Delayed

The project involves expansion of Kuwait’s international airport to increase capacity to handle 13m passengers annually by 2016; this will be increased to 25m passengers in the second phase and 50m in the third phase. The expansion includes construction of a new terminal building and extension of the existing runways, construction of a hotel, car parks and associated aprons and remote stands. In November last year, the CTC announced that a consortium of Kharafi National and Turkey’s Limak Holding was awarded the contract. Last month, KUNA reported that a tender committee of public works ministry has recommended that all bids to construct the new terminal be rejected. According to media reports, the lowest bid exceeded the estimated cost of the project by 39% and did not meet technical specifications.

5. LOWER FARS HEAVY OIL DEVELOPMENT PROJECT – PHASE 1

Owner: Kuwait Oil Company (KOC)
Budget: $4.2bn
Progress: EPC awarded

The Lower Fars field is located about 80km northwest of Kuwait City. The EPC contract covers drilling of hundreds of wells and data collection, as well as pilot schemes using various extraction methods. The consortium of Petrofac and Consolidated Contractors Company (CCC) overcame competition from 19 international contractors to bag the EPC contract in January 2015. When fully operational, the initial phase of the Lower Fars heavy oil project is expected to produce around 60,000 b/d. The scope of the contract covers main central processing facility (CPF), associated infrastructure, production support complex and a 162km pipeline which will transport the heavy crude from the CPF to South Tank Farm located in Ahmadi.

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6. HEAVY OIL PRODUCTION FACILITIES PROJECT

Owner: Kuwait Oil Company (KOC)
Budget: $4.2bn
Progress: Invitation to bid

This oilfield-cum-refinery project, initiated by the Kuwait Oil Company (KOC), is located in the north of Kuwait and includes transportation, storage and distribution of crude as part of exploration and development of oilfields. The heavy oil production facilities will have a capacity of 60,000 b/d and will play a very important role in helping Kuwait meet its oil production target of 4m b/d by 2020. Scope of work covers steam injection and production for heavy oil along with a support complex tank farms and a 270,000 b/d pipeline. Petrofac has emerged as the lowest bidder for the EPC contract followed by SK Group of South Korea. KOC has also invited international companies to bid for an enhanced technical service agreement to develop the field.

7. GAS TRAIN PROJECT MINA AL AHMADI REFINERY

Owner: KNPC
Budget: $1.5bn
Progress: Invitation to bid

The project involves an EPC contract for the construction of a fifth gas train with the capacity to process 805m cubic feet of gas per day and 106,000b/d of condensates. The gas train, which will separate associated gas produced in the north and southeast of the country into its basic components, will accomodate upstream capacity increase at Kuwait Gulf Oil Company (KGOC) and Kuwait Oil Company (KOC). UK’s Amec was awarded the FEED and project management consultancy contracts for the project. FEED has already been evaluated and KNPC is appraising the project’s economics in light of the changes in the amount of gases from KOC fields. Last year, nine contractors were prequalified to bid for the EPC contract. Kuwait’s Central Tenders Committee (CTC) has extended the deadline to submit bids from the previous deadline of March 3, 2015.

8. BUBIYAN PORT DEVELOPMENT PROJECT

Owner: Ministry of Public Works
Budget: $1. 2bn
Progress: Construction of Phase 1 underway

Bubiyan is Kuwait’s largest island separated from the mainland by the Subbiya Channel. Long undeveloped due to its poor soil conditions, the government approved a plan to develop Bubiyan in 2004 and turn it into commercial seaport with a total handling capacity of 2.5m containers a year. A local/Chinese joint venture of Gulf Dredging & Contracting, Shaheen Alghanim Roads & Bridges and China Harbour Engineering Company were awarded the $409m Phase 1 contract for the construction of a 34km road, a 1.4 km road bridge, landfill, soil improvement works and a railway embankment. Phase 1 is expected to be completed by 2018. In August last year, the ministry prequalified consultants for designing stages 3B and 3C of the project.

9. AL KHIRAN INDEPENDENT WATER & POWER PROJECT – PHASE 1

Owner: Kuwait Authority for Partnership Projects (KAPP)
Budget: TBA
Progress: Request for qualification

The Al Khiran IWPP will include a greenfield power and seawater desalination plant with a capacity of 1,500 MW and 125 MIGD respectively with the Ministry of Electricity & Water as the off-taker. The project will be located to the south of existing Al Zour South power and water project in Kuwait and include a 400kV substation. Low sulphur fuel oil, gasoline, crude oil and/or natural gas will be used for fire the plant. The desalination component will use multistage flash (MSF), multiple-effect distillation (MED) and/or RO technology. KAPP has invited interested groups to submit prequalification bids for the Build-OperateTransfer (BOT) contract by April 2, 2015.

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10. KABD WASTE-TO-ENERGY PLANT

Owner: KAPP
Budget: TBA
Progress: Request for qualification

The plant will be located in Kabd, about 25 km from Kuwait City and will treat up to half of Kuwait’s municipal waste. The waste-to-energy plant will have an initial capacity of 3,275 tonnes a day. To be developed on BOT basis, the contract term will be for 30 years, in addition to a two-year period for construction and equipment installation. The electricity generated by the plant will be purchased by the Ministry of Electricity & Water. Last year, KAPP’s predecessor PTB invited companies to pre-qualify for the BOT contract, and received expressions of interest from 13 firms. It also appointed a consortium led by PwC to provide transaction advisory services. KAPP is expected to reveal the project’s status by March 2015.

By: WCK Staff Reporter.

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