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Kuwait refinery plan on track

Kuwait, March 25, 2008

Political upheaval in Kuwait will not affect plans for a giant new oil refinery and US firm Fluor Corporation is close to winning a $2 billion contract to build part of the plant, Kuwaiti officials said.

Kuwait's ruler dissolved parliament on Wednesday to end a row between the cabinet and parliament which has delayed economic reforms in the world's seventh-largest oil exporter.

A new government is to be appointed after elections on May 17.

State-owned refining arm Kuwait National Petroleum Company (KNPC) chairman Farouq Al Zanki said parliament's dissolution would not alter plans to develop its oil sector.

"In general, I don't think this will affect the strategic projects in the oil sector," he said.

"There is no change in plans for the refinery. The project has the approval of the Supreme Petroleum Council and will be hopefully awarded in April," said another Kuwaiti oil official. Other officials gave the same timeframe for award of the contracts.

Fluor has been in talks since last summer for one of the five packages to build the refinery. The US company is negotiating to provide steam generation, water systems and other infrastructure for the new refinery. Fluor already holds the project management contract for the refinery.

"It's (the Fluor deal) is more or less done. They are just waiting for rest of the tender to be decided before making the announcement," one Kuwaiti oil official said.

KNPC launched a tender in June for the 615,000 barrels per day Al Zour refinery, which would be one of the largest refineries in the world.

Kuwait has said more than 10 firms have bid for the other packages.

Skyrocketing costs in the energy industry have already delayed the refinery start-up date by more than a year.

Kuwait cancelled a first tender last February after bids came in far above its initial cost estimate, leading it to double the budget later to $14 billion.




Tags: Kuwait | Refinery | Fluor | political | Crisis |

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