Fluor at the Front End of Kuwait's Billion Dollar Refining and Petrochem Projects

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Fluor (NYSE:FLR) (Aliso Viejo, California) will provide administrative and consultative services to the new $3.5 billion refinery to be built by Kuwait's National Petroleum Company (KNPC). This contract is one of the fruits of an agreement set earlier in 2004, through which Fluor will provide comprehensive consulting services over a five-year span, with a special focus on project management, as well as provide similar services for a project to expand and upgrade Kuwait's existing refineries.

Construction on the new 450,000 barrel per day (bpd) refinery is scheduled to start in 2007 and should be completed in 2010, when the new output will fill the gap left by the closing down of the 200,000 barell per day (bpd) Shuaiba refinery in the same year. The new refinery is a key element in the first phase of Kuwait's $40 billion, 20-year strategic energy plan. For related news item see October 18, 2004 - Major Private Sector Industrial Opportunities Spawned by $40 Billion Kuwait Energy Plans.

The environmentally friendly specifications of the new plant will produce cleaner fuels for Kuwait's power generation plants. KNPC said that the refinery will also produce kerosene and diesel and will be able to handle several types of crude oil, which Kuwait's currently operating refineries are unable to do. These existing plants have a combined output of 930,000 bpd. Currently, Kuwait's maximum crude oil production capacity is around 2.5 million bpd, but is targeted to be four million bpd by 2020. Kuwait controls 10% of global reserves, with refining and processing capacity planned to rise in parallel.

Fluor's contract relating to the construction of new facilities, and the upgrading of existing facilities is broad based and includes project management, project controls, construction management, and training of Kuwait Oil Company (KOC) project staff. Services will be performed in offices provided by KOC at its headquarters in Ahmadi in Kuwait with front-end design packages produced in the Fluor's office in Camberley, U.K.

Another Fluor project in Kuwait was announced in mid-November 2004. This is a major petrochemical project at Shuaiba. Fluor will be in a joint venture with Dow Chemical Company (NYSE:DOW) (Midland, Michigan) and Kuwait's Petrochemical Industries Company (PIC) to provide utility and infrastructure front-end engineering, and overall project management consultancy services.

The integrated petrochemical project, Olefins II Program, will receive an over $1 billion investment. The completed project will double the capacity at the existing olefins complex at Shuaiba. It will include the construction of an 850,000 tons per year (tpy) cracker, a 600,000 tpy ethylene glycol unit, a 50,000 tpy ethyl benzene/styrene monomer unit, and a debottleneck expansion of an additional 225,000 tpy polyethylene capacity at the existing complex. With work at the site starting in early 2005 completion is scheduled in 2007.

Front-end design on Olefins II will be executed in Fluor's Haarlem, Netherlands office with close liaison with personnel from licensor technology offices.

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