Kuwait awards $11.5bn contracts for new refinery

Kuwait National Petroleum Co said it awarded four contracts worth $11.5 billion (10.5 billion euros) to international consortia Tuesday to build a 615,000 barrel per day refinery.

A $4.25 billion contract for the main manufacturing units went to Spain's Tecnicas Reunidas, China's Sinopec Engineering and South Korea's Hanwha Engineering and Construction Corp, spokesman Khaled al-Assoussi said in a statement.

The second and third contracts for infrastructure, worth a combined $5.75 billion, were awarded to a consortium of US Fluor Limited with South Korean Hyundai heavy Industries and Daewoo Engineering and Construction.

A fourth contract valued at $1.5 billion was awarded to South Korean Hyundai Engineering and Construction and SK Engineering and Construction and Italian Saipem, Assoussi said.

A fifth contract is scheduled to be awarded within the next two weeks, he said.

The project, divided into five packages, is estimated to cost $16.1 billion after Kuwait's Supreme Petroleum Council agreed two weeks ago to increase the refinery budget by $2.9 billion after bids exceeded the initial estimates.

Last year, Kuwait awarded tenders for a $12-billion project to upgrade two of the three existing refineries.

When that work is completed by around 2018 and the new refinery is built, Kuwait's refining capacity will increase to 1.4 million bpd from 930,000 bpd currently.

Kuwait says it sits on 10 percent of the world's proven crude reserves and is pumping 2.8 million bpd.