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KNPC extends Al-Zour bids, to name winners in Feb

Kuwait - Kuwait National Petroleum Company (KNPC ) extended its bid closing date for the construction of the country's fourth refinery till December 26, 2007, and is expected to announce the winning bidders by end of February, an oil official told Kuwait Times yesterday. KNPC gave the prequalified companies a ten-day extension from the original date of December 16th, to submit their bids for building the new $14 billion Al-Zour refinery.

There are a large number of bidders and more than one is applying for each of the four packages," said the official who spoke on the condition of anonymity. He confirmed the project's budget still stands at KD 4 billion (about $14 billion).

The four packages include the construction of: crude processing units; hydrogen production and recovery; tank storages; and Marine export facilities. In May 2007, Kuwait raised the budget for Al-Zour project to $12 billion after bids came at more than double the original $6.3 billion budget. In September, the budget for the project has been once again approved by the Supreme Petroleum Council raising it to $14 billion.

On September 29, KNPC announced it had short-listed 19 companies for four packages for the new refinery construction which is to be completed by 2012. Among the pre-qualifiers are Italy's Snamprogetti, South Korea's Hyundai Heavy Industries, Japan's JGC and US firm Foster & Wheeler. The bidding is based on a cost plus profit margin, which means reimbursing companies' expenses as well as providing a fixed profit.

The giant 615,000 barrels per day (bpd) environmentally-friendly refinery will mainly produce low-sulfur fuel oil for the country's power plants. It will be built in two stages - the first will meet domestic requirements including electricity generation and water desalination and the second will produce a range petroleum products for export. The new Al-Zour refinery is to replace the ageing 200,000-bpd Shuaiba refinery.

KOTC tender

Kuwait Oil Tanker Company (KOTC) is to float a tender to build six new oil tankers as a part of its fleet renewal plan by end of next month, the company's chairman told Kuwait Times yesterday. "We are working with the Central Tenders Committee to finalize the requirements of the new tender and will float it by end of January," said Nabil Bouresli, Chairman of the KOTC , but declined to give an expected cost figure for the new tankers.

Prices have gone up, but we will know the expected cost for the second phase by the first quarter of 2008," he said. Last month, Bouresli said the actual cost of the first phase which included building nine oil tankers in addition to an oil service boat was $600 million. "When KOTC started building its tankers, the cost of a giant oil tanker was $100 million, but now it is between $140 million to $150 million," KOTC 's chairman told reporters in November.

The second phase of the fleet renewal includes building four VLCC (very large crude carriers) tankers with a capacity of 320,000 metric tons each, and two tankers for petroleum products. The second phase is to be concluded within the next three years. KOTC plans to build total of 28 new tankers over three phases.

KOTC is to receive the last tanker, Gas Al-Naqa, a $83 million liquefied petroleum gas tanker with a capacity of 82,000 tons by end of December. Sadra 2, a 5000 tons tanker vessel is to be delivered by March next year thus concluding the first phase of the company's fleet renewal, noted Bouresli.

Rania El Gamal

© Kuwait Times 2007