Kuwait may cancel $6 billion refinery tender as costs surge

Kuwait may cancel $6 billion refinery tender as costs surge
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First Published: Sun, Feb 18 2007. 09 26 PM IST
Updated: Sun, Feb 18 2007. 09 26 PM IST
Agencies
Kuwait may cancel a tender to build a new $6.4 billion refinery and invite new bids for the project, after companies submitted offers last month that exceeded initial budget estimates, an official said.
“If we retender it could take months,” Ahmad al-Jimaz, the refinery project’s manager at state-run Kuwait National Petroleum Co., said in a phone interview today from Kuwait. “We barely got enough bidders for the project.”The company, which operates Kuwait’s existing refining plants, is preparing to cancel four tenders and invite new bids for the project, according to a statement on the company’s Web site today. Kuwait News Agency said that bids to build the plant were double the original $6.4 billion budget.
Kuwait needs the new plant to replace its oldest facility at Shuaiba, which has had repeated shutdowns because of technical faults over the last year. Refining capacity of more than 900,000 barrels a day at the country’s three plants was halted for an hour today by a power failure.
Persian Gulf oil producers are facing higher costs as demand for engineering services to help increase production and refining output outpaces supply. Royal Dutch Shell Plc said in July that costs to build the Middle East’s first plant to process natural gas into clean fuels in Qatar could triple to $18 billion.
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First Published: Sun, Feb 18 2007. 09 26 PM IST
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