OPEC producer Kuwait has decided to scrap a multi-billion-dollar joint petrochemical venture in Canada after it was found to be unfeasible, a newspaper reported on Thursday.
The state-owned Petrochemical Industries Company (PIC) decided in early 2022 to suspend the project after it suffered from a loss of nearly 71.4 million Kuwaiti dinars ($235.6 million) because of work stoppage and the cancellation of two project loans of $1.7 billion and $150 million due to the spread of Coronavirus.
The Company, the Gulf state’s overseas downstream investment arm, presented a recommendation for a complete cancellation to the Kuwait Petroleum Corporation (KPC), the top oil authority in the country.
“KPC Board of Directors has decided to cancel the project, which has an estimated cost of $2.5-3 billion, at the request of PIC,” the Kuwait Arabic language daily Alrai said, quoting informed sources.
It said PIC is now studying a number of other projects which will be revealed later, adding that equipment bought for the petrochemicals venture in Alberta for around $246 million would be sold to minimise project losses.
PIC agreed in 2019 to set up the joint venture in Alberta with Pembina Pipeline of Canada and that the two firms had shortlisted bidders for the project.
Pembina said in 2020 the two partners agreed to invest nearly$ 3.4 billion for the construction of a propane dehydrogenation (PDH) plant and a polypropylene (PP) upgrading facility. The project was to be owned equally by their joint venture Canada Kuwait Petrochemical (CKPC).
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(Writing by Nadim Kawach; Editing by Anoop Menon)