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Kuwait set to boost oil stocks with construction of refinery

KNPC gears up to increase production by drilling out a new deal for Kuwait’s fourth oil refinery development

Kuwait National Petroleum Company (KNPC) is expected to invite bids next month for the construction of a new US $6.3 billion (KWD1.8 billion) oil refinery.

The first two tenders will be for manufacturing units in a 600,000 barrels-per-day (bpd) refinery; the third tender is for building utilities and services; and the fourth is for storage tanks and a pier, according to Sami al-Rasheed, chairman
of KNPC.

The refinery will be built in Al-Zour area, 100km south
of Kuwait City, near the Saudi Arabia border. The project is
expected to be completed in early 2010.

Kuwait currently has three refineries; at Al-Ahmadi, Mina Abdullah and Shuaiba, all in the emirate’s oil-rich southern region. They have a combined refining capacity of about 915,000 bpd.

The largest refinery facility in Kuwait, at Al Ahmadi, has a 2.1-km state-of-the-art offshore pier (pictured), which was built by South Korean Hyundai Engineering at a cost of more than $330 million and took three years to complete.

Last year KNPC also mobilised plans to modernise the Al-Ahmadi and Mina Abdullah refineries at an estimated cost
of $3 billion. That project is planned for completion in
early 2011.

Once the new refinery and upgrade project is completed, KNPC plans to shut down the Shuaiba refinery, leaving it with three refineries with a capacity of around 1.4 million bpd.

The company, which is also an OPEC member, sits on 10% of the world’s tapped oil reserves, and currently produces 2.6 million bpd of crude oil at full capacity.

Kuwait plans to invest up to $40 billion in the next 15 years to modernise its oil sector, which generates more than 90% of public revenue.

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