The National reported that the government of Kuwait has breathed new life into a long stalled USD 14.5 billion refinery project by giving preliminary approval for funding.

Parliament on Tuesday passed 4 year, USD 104 billion spending plan to provide funding to the oil and gas industry and other key development projects. An official at Kuwait National Petroleum Company, who was not authorised to speak to the media confirmed that funding for the fourth refinery was included in the spending plan.

The KNPC official declined to speculate on a timetable for the refinery, adding that the project will be implemented on the approval of the Supreme Petroleum Council. KNPC said that last month it had paid compensation to a group of Korean and Japanese companies after breaking the contracts worth USD 8.3 billion and would reach a similar understanding with Fluor, a US engineering firm.

Mr Kong Hong pyo the executive VP of Samsung Engineering said that the government shocked foreign investors when it unilaterally cancelled contracts for the refinery last March, after Kuwait’s parliament complained that the project had not been correctly awarded. But the new progress from the government, together with a move to compensate contractors affected by the cancellation had revived interest in the project. Mr Kong said that in Kuwait, there has been a considerable delay for their fourth refinery, but I understand they settled all the pending issues with their previous contractors and I was told the new tender is coming some time later this year.

The refinery at Al Zour, which would be the country’s fourth plant, is a crucial part of Kuwait’s efforts to modernise its energy sector and diversify the economy away from crude oil exports.

(Sourced from The National)