Kuwait plans $19b refinery tender

Kuwait City: State refiner Kuwait National Petroleum Co (KNPC) plans to upgrade its Mina Abdullah and Mina Al Ahmadi refineries with up to five billion dinars ($18.73 billion), state news agency Kuna said.

The tender would be launched in August after winning approval from Kuwaiti authorities, KNPC's deputy chairman Sa'ad Al Sa'ad told Kuna late on Monday.

Al Sa'ad said KNPC wanted to upgrade the capacity of its Mina Abdullah and Al Ahmadi refineries to 800,000 barrels per day from 600,000 bpd by adding new units or improving existing ones.

The project's cost would range between four billion and five billion dinars, up from an initial estimate of 1 billion in 2003, he said.

The refinery upgrade, which is due to take effect after closure of the ageing Shuaiba refinery in 2011, is part of plans by the major Opec producer to raise refinery capacity to 1.415 million bpd from 930,000 bpd.

KNPC is also due to announce the winners for a tender to build a 615,000 barrel per day (bpd) refinery, the world's biggest refinery project.

Foreign interest

Kuwait, the world's seventh-largest oil exporter, has said that more than 10 companies presented bids for the refinery's five packages, among them Italian, French and US companies.

KNPC has delayed the tender several times and more than doubled the budget to $14 billion amid spiralling costs in the oil industry.

Meanwhile, Kuwait Petroleum Corp (KPC) said it will hand regulators in Beijing a feasibility study for a planned refinery joint venture in southern China within a month.

Mohammad Rashid Jasem, vice-president and chief planning officer of Kuwait Petroleum International (KPI), said the current blueprint for the plant at Nansha in Guangdong province gives a consortium led by his firm a 50 per cent stake, with the other half of the project owned by China's Sinopec Corp.

"We hope to get approval for Nansha within this year," he told reporters on the sidelines of the China Petrochemical Focus conference in Beijing, adding that the consortium could include another refiner and a petrochemical firm.

If China's energy planners approve a draft that does not give Sinopec a majority stake, it would be a rare concession to foreigners in a tightly controlled strategic sector.

But Beijing is keen to secure a steady flow of oil from Kuwaiti fields as it already relies on imports for half of its needs, and KPC has said it aims to become one of China's top five crude suppliers within three years.