Kuwait to Finally Start Construction on the Middle East's Largest Oil Refinery

After years of delays the Kuwait National Petroleum Company (KNPC) looks as though it will finally go ahead with plans to build the Middle East’s largest oil refinery.

Five international engineering firms have submitted tenders to win the project management and consultancy contract for the Al-Zour refinery, including US-based Foster Wheeler and Fluor Corp, Australia's WorleyParsons, France's Technip, and Britain’s Amec. The government is expected to announce the results next month, a senior executive from KNPC told Reuters.

“The bids have been submitted and now we are in the evaluation phase... I expect the result to be out in August,” he  said.

Other firms have also bid on the engineering, procurement, and construction contract, and hope to receive news on their success by the 7th if August.

The refinery will process 615,000 barrels of crude a day, cost an estimated $14.5 billion to construct, and start operation in 2018.

Initially planned ten years ago, the project has suffered a series of delays due to a political conflict over allegations of corruption between the nation’s cabinet and the National Assembly. Due to this political instability Kuwait has seen eight governments come and go in just six years.

According to Kamel Al Harami, an independent Kuwaiti oil analyst, in order to prevent further delays the Al-Zour refinery has been handed over to the state audit bureau meaning that it no longer needs to be approved by parliament, and can hopefully avoid political interference.

Although Al Harami is still doubtful that it will be completed by the set date. “I'm not optimistic - no one including the current oil minister has laid out a plan and milestones for this project, and without that it'll never be complete,” he said.

By. Charles Kennedy of Oilprice.com