PROJECTS: Kuwait Al-Zour refinery contractors seek delay damages: report

Contractors for the multi-billion-dollar Al-Zour oil refinery in Kuwait are seeking damages for alleged losses resulting from long delays in the execution of the project due to the Coronavirus curbs, a Kuwaiti newspaper revealed on Tuesday.

 

The contractors have sent a letter to the Kuwait Integrated Petroleum Industries Company (KIPIC), the OPEC member’s downstream arm, saying the government decision to shelve work at one of the world’s largest refineries has caused them losses of more than 500 million Kuwaiti dinars ($1.65 billion), the Arabic language daily Alrai said, citing local industry sources.

 

“KIPIC has been negotiating with the contractors to reach a compromise as the company itself also suffered losses from the delay,” the paper said.

 

“The contractors told KIPIC that the delay in the execution of such a big project was due to government restrictions and that they should not be blamed for it.”

 

The paper did not name those firms but said that they may escalate their demands and resort to courts unless KIPIC responds positively.

 

“On the other hand, KIPIC said that it would also demand damages for the delay in some works in Al-Zour on the grounds this amounts to failure to abide by their contracts…KIPIC told the contractors that it is in the interest of all to reach a compromise,” the paper added.

 

In 2014, KIPIC awarded contracts to several local and foreign firms for the construction of the $15 billion Al-Zour refinery in South Kuwait.

 

With a production capacity of 615,000 barrels per day (bpd), the refinery was part of the massive 'clean fuel project' launched by the Gulf country in 2015 to boost refining output to nearly 1.5 million bpd.

 

(Writing by Nadim Kawach; Editing by Anoop Menon)