Kuwait North Zour Power Plant Ready in 2015, Official Says

Kuwait’s North Zour power station, to be built by GDF Suez SA, will be operational one year later than planned as a joint venture is set up, the director of studies and research at the Kuwait Ministry of Electricity & Water said.

“They are waiting to establish Al Zour North Co.,” Suhaila Marafi said today in an interview in Dubai. “The plant will be delayed and be ready in 2015.”

The construction contract has faced opposition in Kuwait’s parliament as lawmakers questioned then-Finance Minister Mustafa al-Shimali over the alleged failure to establish a shareholding company to build the 1,500-megawatt plant. Kuwait’s Partnerships Technical Bureau, which made the tender award, ignored implementing the law and “paid no attention to its articles,” invalidating measures taken by the bureau, opposition lawmakers said in a copy of the request filed in May.

A group led by Paris-based GDF Suez (GSZ) won the work in February for phase one of the Al-Zour North plant, which cost as much as $3 billion. The project is part of the country’s $111 billion development plan to modernize and restructure Kuwait’s oil-based economy. The government plans to hold a maximum of 10 percent of the company responsible for building the plant while a strategic investor will hold 40 percent. The remaining 50 percent is to be sold in an initial public offering.

Clashes between lawmakers and the government have led to a series of parliament dissolutions and Cabinet resignations that have delayed projects Kuwait, the third-biggest producer in the Organization of Petroleum Exporting Countries. A 4-billion dinar ($14.2 billion) refinery is being re-tendered after contracts awarded in 2008 were canceled.

Kuwait plans to raise total power capacity to 25,000 megawatts from 14,200 megawatts by 2020 through building additional phases to North Zour and developing renewable energy projects, Marafi said. Peak demand is currently 11,850 megawatts and will increase to 21,600 megawatts in 18 years, she said.

Three additional phases of North Zour are planned by 2020, Marafi said.

To contact the reporter on this story: Ayesha Daya in Dubai at adaya1@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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