Kuwait finalizes contracts for grassroots refinery

Kuwait National Petroleum Co. (KNPC) has finalized a series of contracts to groups of oil and gas service providers for construction of its long-planned 615,000-b/d Al-Zour refinery complex in southern Kuwait as part of the company’s Clean Fuels Project (CFP) (OGJ Online, July 1, 2011).

The state-run company officially signed five contract packages let to three separate consortiums of service providers to build the refinery in a ceremony held on Oct. 13 in Al Ahmadi, KNPC said in multiple posts to its various social media sites.

The signing ceremony follows KNPC’s previous awards of the contract packages for the grassroots refinery in July and August (OGJ Online, Aug. 27, 2015; July 31, 2015).

Package 1

In July, KNPC let a $4.1-billion lump-sum turnkey contract to a consortium of Spain’s Tecnicas Reunidas SA, China’s Sinopec Engineering (Group) Co. Ltd., and Hanwha Engineering & Construction Corp. of South Korea to provide engineering, procurement, construction, and commissioning (EPCC) for main processing units at the plant.

The consortium’s scope of work under the contract, which is to last 45 months, includes delivery of services for the following:

• 3 crude distillation units, each with a processing capacity of 210,000 b/d.

• 3 atmospheric residue desulfurization units, each with a processing capacity of 110,000 b/d.

• 3 diesel hydrotreating units, each with a processing capacity of 62,000 b/d.

• 2 naphtha hyrdrotreating units, each with a processing capacity of 18,200 b/d.

• 2 kerosene hydrotreating units, each with a processing capacity of 53,000 b/d.

• An 8,500-b/d saturated gas unit.

• A heavy oil cooling unit.

Packages 2-3

KNPC let two additional contract packages worth an estimated $5.75 billion to a joint venture of Fluor Corp., Daewoo Engineering & Construction Co., and Hyundai Heavy Industries Co. for delivery of engineering, procurement, and construction (EPC) on associated units, utilities, and infrastructure necessary for the project.

The Fluor-led consortium, FDH JV, plans to begin work on the two Al-Zour packages soon, Fluor said.

While the company did not disclose additional details regarding the nature, scope, or timeline of FDH JV’s Al-Zour-related activities, Fluor did confirm the consortium currently is executing work under KNPC’s previous contract award to the group for design, construction, and commissioning of a second phase of the Mina Abdullah refinery as part of the CFP.

Package 4

In August, KNPC let Package 4 to a joint venture of Italy’s Saipem SPA and India’s Essar Projects Ltd. to provide EPC services for tankage, associated road works, buildings, pipe racks, pipelines, water systems, and control systems for the proposed Al-Zour refinery.

The consortium’s scope of work under the contract, which is scheduled to be completed by early 2019, also includes delivery of precommissioning services as well as assistance during commissioning, startup, and performance testing phases for infrastructure and systems included in the package.

Package 5

KNPC awarded the fifth and final contract package for Al-Zour to a consortium of South Korea’s Hyundai Engineering Co. Ltd., SK Engineering & Construction, and Italy’s Saipem.

As part of the $1.5-billion contract, the consortium will deliver EPC services for a marine export terminal and associated installations to be located at the refinery.

These latest major contracts for the grassroots refinery follows a series of contracts KNPC previously awarded for Al-Zour since first announcing the project in 2011 (OGJ Online, Mar. 13, 2014; Dec. 3, 2013; Dec. 4, 2012).

The new refinery is scheduled to be commissioned sometime in late 2019, according to KNPC.

Under the CFP, KNPC plans to integrate and upgrade the 270,000-b/d Mina Abdullah and 466,000-b/d Mina Al Ahmadi refineries and ultimately close the 200,000-b/d refinery at Shuaiba once construction is completed on the Al Zour plant (OGJ Online, Mar. 5, 2015).

The newly integrated refineries will operate as a merchant complex with total capacity of about 800,000 b/d.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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