Kuwait National Petroleum Company (KNPC) announced on Thursday it is going to build the Al Zour oil refinery despite political tensions that continue to put many economic development plans on hold.
A senior executive at KNPC said the government expects to announce next month the winner of the Middle East’s largest oil refinery project management and consultancy (PMC) contract, a Reuters report said.
“The bids have been submitted and now we are in the evaluation phase…I expect the result to be out in August,” Reuters quoted an executive, who declined to be named under briefing rules, as saying.
Analysts believe the Al-Zour project will help restore confidence in Kuwait’s economic management and the government’s ability to get things done. It will also have an impact well beyond its monetary value, the Reuters report said.
The project, originally planned a decade ago, aims to provide fuel for power generation and water desalination facilities and export any excess. The oil refinery would process 615,000 barrels per day, coming online in 2018; it would exceed the capacity of the Middle East’s largest refinery, Saudi Arabia’s 550,000 bpd Ras Tanura plant, and cost the government an estimated $14.5 billion.
The Al-Zour refinery project was originally awarded in 2008 to companies including South Korea’s GS Engineering & Construction and Japan’s JGC Corp. But in 2009 the cabinet decided to halt the project on the grounds that oil prices were then too low to finance oil projects, industry sources said.