Korean Firms Win Contracts for Kuwaiti Refinery

Four Korean and a Japanese firm were on Sunday declared winners of four major contracts worth billions of dollars to build a new refinery in Kuwait, the AFP reported in Kuwait.

The total value of the bids made by the companies was around $8.3 billion, the news agency quoted Mohammad al-Ajmi, spokesman for national refiner Kuwait National Petroleum Company (KNPC) as saying.

One contract for the main manufacturing units was awarded to a consortium of South Korea's GS Engineering and Construction Corp. and Japanese JGC Corp. for $4 billion, he was quoted as saying.

SK Engineering and Construction Co. of Korea was awarded the subsidiary units for $2.06 billion, while Daelem Industries, another South Korean firm, won a contract of tanks for $1.184 billion.

Korea's Hyundai Engineering and Construction Co. was awarded a contract for offshore facilities at $1.12 billion, Ajmi said.

A separate contract for consultancy, which was not part of the tender, had been earlier awarded to U.S. Fluor Engineering firm and it was reported to be for $2 billion.

Kuwait has earmarked four billion dinars ($15 billion) to build the 615,000 barrels per day (bpd) refinery to be constructed in the southern Al-Zour area, close to the border with Saudi Arabia.

The first round of bids was scrapped in September because bids came in at more than $15 billion, way above the initial budget of $6.3 billion.

State-owned KNPC subsequently earmarked $15 billion for the project.

The new contracts will be based on a cost plus profit margin, which means Kuwait paying the cost of the project plus an agreed profit which has not been disclosed, making the total cost higher than the $8.3 billion announced, AFP said.