• Al Zour to more than double Kuwait's refining capacity
  • Refinery to be integrated with petrochemical complex

Daewoo Engineering & Construction Co., Tecnicas Reunidas SA and Hyundai Heavy Industries Co. are among companies that signed contracts today to build Kuwait’s $16 billion Al Zour oil refinery, which will more than double the nation’s processing capacity.

The refinery, with a capacity of 615,000 barrels a day, will raise Kuwait total refining capacity to 1.4 million barrels a day when completed in July 2019, Mohammad Ghazi Al-Mutairi, chief executive officer of state-owned Kuwait National Petroleum Co., said at the signing ceremony in Kuwait City. Al Zour refinery, valued at 4.87 billion dinars ($16 billion) will be integrated with a planned petrochemical complex which KNPC will discuss at an upcoming board meeting, he said.

“Al Zour refinery is one of the world’s largest grass root plants being built from conceptual stage,” Al-Mutairi said. “Al Zour refinery along with other ongoing mega projects will change the landscape of the oil refining industry in Kuwait. ”

Al Zour’s construction has been planned since 2007, and was delayed by internal political disputes. The project is another move by oil producers in the Gulf Cooperation Council states to diversify their source of income by processing crude at home after suffering revenue loss from lower oil prices since last year.

Heavy oil from new fields in Kuwait will be used at the refinery to produce low-sulfur diesel, 340,000 barrels a day of high value light products and 225,000 barrels a day of fuel oil to feed power-generation plants in the country, Al-Mutairi said.

The refinery will be built in five packages, with the first valued at 1.28 billion dinars awarded to Technicas, Hanwha Engineering & Construction Corp. and China Petroleum & Chemical Corp., known as Sinopec, Khaled Al-Awadhi, KNPC project manager, said at the signing ceremony. The second and third packages at a combined value of 1.75 billion dinars were awarded to Fluor Corp., Daewoo and Hyundai Heavy Industries Co., he said. The fourth package valued at 475 million dinars was given to Saipem SpA and Essar Oil Ltd., and the fifth package of 454 million dinars to Hyundai Engineering & Construction Co., Saipem and SK Holdings Co. Ltd, he said.

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