Al-Zour refinery granted $2.5bn by Kuwait
Kuwait National Petroleum Company has been provided additional funds following a "sharp rise" in the value of Al-Zour refinery project
Kuwait has approved an additional $2.6bn (KWD800m) for the budget of the planned Al-Zour oil refinery project, following a sharp rise in the value of submitted bids, according to a Kuwaiti oil official.
“We have obtained final approval from the board for the additional funds in the budget of Al-Zour project,” Mohammed Ghazi Al Mutairi, CEO of the state-owned Kuwait National Petroleum Company (KNPC), told Kuwait’s Arabic language daily Al Seyassah.
He said the increase pushed up the refining project’s total investment to between $14.95bn and $15.5bn (KWD4.6bn-4.8bn).
Additional packages of the project, involving one of the world’s largest refineries, will be awarded after funds are approved by the country's Supreme Petroleum Council.
KNPC had previously set a budget for $14bn (KWD4bn) for the oil refinery in 2006, which aggravated due to the rising construction costs.
Newswire Reuters reported on Sunday (21 June, 2015) that the construction start-up date of Al-Zour oil refinery is expected to be pushed beyond early 2019, since KNPC is seeking additional funds to finance the giant plant.
The 615,000 barrel per day oil refinery, originally planned more than a decade ago, will be the biggest in the Middle East, but the project has been repeatedly delayed by bureaucratic and political issues, including tensions between Kuwait's parliament and the cabinet.
Officials had previously said start-up would occur by late 2018 or early 2019.
The project was supposed to supply 225,000 barrels a day of low sulphur fuel oil (LSFO) to local power plants. It will also produce jet fuel, kerosene, and naphtha feedstock for petrochemical plants.