Kuwait hikes budget for new refinery
Thursday, 27 September 2007
KUWAIT CITY, Sept 26 (AFP): Kuwait has again increased its budget for a new oil refinery to more than 14 billion dollars after scrapping an initial tender round because of high cost estimates from international bidders.
"The new budget approved by the Supreme Petroleum Council is four billion dinars (around 14.4 billion dollars)," Kuwait National Petroleum Co (KNPC) chairman Sami al-Rasheed told reporters yesterday.
The petroleum council, the highest authority on oil affairs in the OPEC member state, approved the new budget for the project at a meeting on Tuesday, he said.
Kuwait had announced in May that it had almost doubled the budget for the 615,000 barrel per day (bpd) refinery from 6.3 billion dollars to 12 billion dollars.
Oil officials were forced to cancel the refinery tender last year after bids by international companies came in at around 15 billion dollars.
KNPC, the national refiner, will soon announce the names of selected international oil companies for the project and then invite bids.
The new contract will be based on a cost plus profit margin, which means Kuwait paying the cost of the project to the successful bidder plus an agreed profit, Rasheed said. Construction is due to start in one year or 18 months, with the refinery to come on stream by the end of the first quarter of 2012, he said. Completion was originally planned for 2010. KNPC is also planning a multi-billion-dollar project to modernise two of its three refineries at Al-Ahmadi and Mina Abdullah, which currently have a combined capacity of just over 700,000 bpd.
"The new budget approved by the Supreme Petroleum Council is four billion dinars (around 14.4 billion dollars)," Kuwait National Petroleum Co (KNPC) chairman Sami al-Rasheed told reporters yesterday.
The petroleum council, the highest authority on oil affairs in the OPEC member state, approved the new budget for the project at a meeting on Tuesday, he said.
Kuwait had announced in May that it had almost doubled the budget for the 615,000 barrel per day (bpd) refinery from 6.3 billion dollars to 12 billion dollars.
Oil officials were forced to cancel the refinery tender last year after bids by international companies came in at around 15 billion dollars.
KNPC, the national refiner, will soon announce the names of selected international oil companies for the project and then invite bids.
The new contract will be based on a cost plus profit margin, which means Kuwait paying the cost of the project to the successful bidder plus an agreed profit, Rasheed said. Construction is due to start in one year or 18 months, with the refinery to come on stream by the end of the first quarter of 2012, he said. Completion was originally planned for 2010. KNPC is also planning a multi-billion-dollar project to modernise two of its three refineries at Al-Ahmadi and Mina Abdullah, which currently have a combined capacity of just over 700,000 bpd.