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The $33 billion Kuwait refineries projects on the move again

KNPC to pre-qualify EPCs for CFP and NRP projects

Expected on June 13th, the state-owned oil refiner Kuwait National Petroleum Co (KNPC) has decided to postpone to July 4th the dead line for the engineering companies to submit their expression of interest (EOI) for the calls for tenders to be issued for the multiple engineering, procurement and construction (EPC) contracts requested for the Clean Fuel Project (CFP) and New Refinery Project (NRP) projects.

These projects were on hold since 2008, these three weeks are to complete the bidders list.

Together these projects represent $33 billion capital expenditure, about $18 billion for CFP and $15 billion for NRP.

The CFP and NRP projects are intended to meet the new international standards of clean fuel emissions and to increase gasoline capacities in order to meet the local market demand.

KNPC Clean Fuel Project (CFP)

The CFP project would:

 – Involve building at least 30 units at Mina Abdulla and Mina al Ahmadi refineries

 – Produce 10 parts per million (ppm) of low sulphur diesel (<1%) and Euro IV gasoline

 – Provide additional fuel by-products

Following the CFP upgrade, the refining capacity of:

 – Mina al Ahmadi would drop to 346,000 b/d from 466,000 b/d now

 – Mina Abdulla would increase to 454,000 b/d from 270,000 b/d

As a result, the refining capacity following the CFP upgrade would come  to 800,000 b/d.

Since 2008, 37 reactors and vessels were ordered as long lead items, 30 of them were  received by the  company during this year as the manufacturing and delivery of such equipment takes along time.

The CFP will be tendered in three packages.

New Refinery Project (NRP)

The 4th refinery or  the New Refinery Project (NRP) in Zoor area, is one  of the largest strategic projects in the state of Kuwait as its capacity will be around 615,000b/d.

It that sense it will be one the largest refining plants in the Middle East.

The NRP main objective is to  supply power generation plants in Kuwait with  environment friendly fuel and  provide an alternatives  for gas imports  and heavy fuel consumption.

It  will also  be capable of opening  new world  markets for Kuwait petroleum products.

Once the CFP and NRP are completed the refining capacity available to KNPC will rise to around 1,400.000 b/d from the actual 736,000 b/d.

The CFP and NRP projects complement each other and will lead to the  processing of  high quality petroleum products that will open new market outlets  across the world an enhance their competitive ability at those markets.

Designing and manufacturing of the reactors and separation vessel for the project were ordered as long lead items and manufactured.

In fact 36 reactors and 6 vessels have already been delivered  to the company in view of the fact that their manufacturing needs rather a long time.

KNPC has already received approval of the concerned agency to allocate the site in Zoor area for the NRP.

$300 million PMC contract for CFP and NRP 

With market needs increasing and the actual refineries aging, Kuwait seems now ready for decision with the preparation work being tendered in May.

No less than 12 engineering companies had been pre-qualified for this preparation work, all of them will also bid for the CFP and NRP main packages.

In parallel 9 companies including AMEC, Fluor, Technip, Jacobs Engineering and WorleyParsons are bidding for the Project Management Consultancy (PMC) contract estimated around $300 million.

As its neighbors, Saudi Aramco and Qatar Petroleum, KNPC is moving from the Upstream centric NOC profile to the integrated Upstream-Downstream business model in order to reduce its reliance on barrels prices fluctuations.

According to the Kuwait News Agency (KUNA), KNPC is planning to complete the CFP and NRP projects by 2018 with an estimated capital expenditure about $33 billion.

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1 Comment to “The $33 billion Kuwait refineries projects on the move again”

  1. I have involved in this project with GS E&C, who was the originally awarded EPC company and the NRP project was rebided in 2007 and again was awarded to GS E&C and JGC. It was stopped again in 2008.

    I am very familiar with this project and I have independently studied and found an idea of how to save around $300mm to $400mm of the $4.4 billion project.

    Please contact me for further discussion.

    Henry Jo
    Mobile: +82-10-7667-2777

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