South Korean Firms Submit Lowest Bids for $14 Billion Refinery Project in Kuwait

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Researched by Industrial Info Resources (Sugar Land, Texas)--Bidding in the five-package tender process for a $14 billion-plus refinery planned for Al-Zour in Kuwait has put South Korean companies on the inside track with the lowest bids submitted, according to local sources. Kuwait National Petroleum Company (KNPC) pre-qualified 19 companies for the tender for the 615,000-barrel-per-day (BPD) refinery, which would be the biggest in the Middle East. KNPC plans to announce the winning bidders in mid-February.

Unofficial reports state that a consortium of South Korea's GS Engineering & Construction with Japan's JGC Corporation is best placed to win the key crude distillation package. SK Engineering & Construction has come in with the lowest price for the hydrogen-production package. Daewoo Engineering & Construction put in the lowest bid for the tank-storage package, and Hyundai Engineering and Construction with Hyundai Heavy Industries were said to be in pole position for the maritime export facilities package.

Since September 2007, there have been unconfirmed reports that Fluor Corporation (NYSE:FLR) (Irving, Texas) has been in negotiations with KNPC for a $2 billion contract for the refinery project. In the meantime, the Kuwait Oil Company has signed a consulting contract with Fluor worth $334 million. Fluor will provide services to manage projects and other activities over the next five years. This contract extends a previous agreement of the same type.

A joint venture between Hill International (NASDAQ:HINT) (Marlton, New Jersey) and System Development and Project Management (SDPM) have won a $20 million contract on the Al-Zour refinery project for on-call consultancy services, contract and commercial management, interface management, quality assurance and quality control, claims avoidance and management services. Services will also be provided for the Clean Fuels Program at existing refineries at Mina Al-Ahmadi and Mina Abdullah. Upgrading these refineries is estimated to cost about $7 billion.

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