Five builders sign deal for Kuwait clean oil project

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Five builders sign deal for Kuwait clean oil project

Five Korean builders have officially secured orders from the state-run Kuwait National Petroleum Company’s $12 billion Clean Fuels Project (CFP) and will receive a total of $7.1 billion.

The project will upgrade the Mina Al-Ahmadi (MAA) and Mina Abdullah (MAB) facilities located 30 miles South of Kuwait City and expand their refining capabilities from 715,000 barrels per day to 800,000 barrels per day. The CFP is divided into three packages, and five Korean companies were involved in total. They received letters of award in February.

The presidents of the Korean builders that won orders were at the Kuwait National Petroleum Company (KNPC) headquarters in Kuwait City yesterday to seal the deal, where they met Kuwait’s Minister of Oil Ali Saleh al-Omair and KNPC Chairman Asaad Ahmad al-Saad.

Samsung Engineering will handle the first MAB package after forming a joint venture with the United Kingdom’s Petrofac and CB&I of the Netherlands. The affiliate of Samsung Group has a 42.9 percent stake in the package and will collect $1.62 billion for the job. Petrofac has the largest stake at 46.9 percent.

The company said it will carry out the project on a lump-sum turnkey basis, meaning it will be responsible for engineering, procurement, construction and pre-operations, which it said it aims to complete by 2018.

“It fills me with great pride and pleasure to take part in such a momentous and historic project of Kuwait,” said Samsung Engineering CEO Park Choong-heum.

Daewoo E&C, Korea’s third-largest builder in terms of capacity, and Hyundai Heavy Industries partnered with U.S. engineering company Fluor to sign the No. 2 MAB package valued at $3.4 billion. Each company will receive $1.13 billion and will work on the project for 48 months.

GS E&C and SK E&C said that, along with Japan’s JGC, it secured $4.82 billion of the first package to upgrade the MAA facility. The three companies have an equal stake in the work and will make $1.606 billion each.

GS E&C is responsible for building desulfurization and hydrogen production facilities, while SK E&C will manage construction of the sulfur recovery and delayed coking units. It is expected to take 44 months for construction, which will also be completed on a turnkey basis.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]



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