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17 April 2024

S. Korea submits lowest Kuwait refinery bids

By Agencies

South Korean companies have submitted the lowest bids for Kuwait's planned 615,000 bpd Al-Zour refinery, the Middle East's biggest, the Middle East Economic Digest (MEED) said on Saturday.

Kuwait has approved a budget of about $14 billion for the construction of the refinery, more than twice an initial cost estimate.

State refiner Kuwait National Petroleum Co (KNPC), which plans to announce winners in mid-February, has split the project into five packages. The tender expired on December 26.

For the key crude distillation package a consortium of South Korea's GS Engineering & Construction and Japan's JGC Corp is best placed, MEED said, quoting "unofficial bid opening results".

South Korean firm SK Engineering & Construction has submitted the lowest price for the hydrogen production package, MEED added.

For tank storage package South Korean firm Daewoo Engineering & Construction submitted the lowest bid, while Hyundai Engineering & Construction and Hyundai Heavy Industries were best placed for the maritime export facilities package, the magazine said.

KNPC had pre-qualified 19 firms for the tender, with many firms teaming up in alliances.

Industry sources told Reuters in September that KNPC was also in talks with U.S. firm Fluor Corp for a fifth tender, with one of them saying the tender was worth $2 billion.

The world's seventh-largest oil exporter plans to boost refining capacity to 1.415 million bpd from 930,000 bpd with the new plant and upgrades of its Mina Abdullah and Mina Ahmadi refineries.

Kuwait cancelled a first tender for the refinery in February, after bids came in far above its initial budget. The new al-Zour refinery is to replace the ageing 200,000-bpd Shuaiba refinery, which has been hit by several accidents.

Kuwait, a member of Opec, sits on around 10 per cent of the world's oil reserves. (Reuters)