KUWAIT CITY: Kuwait's Supreme Petroleum Council (SPC) has given the green light for two long-stalled oil mega projects worth more than eight billion dinars ($29 billion), a Kuwaiti daily reported Tuesday. Citing unidentified oil sources, the Al-Jarida newspaper said the SPC approved the building of a new state-of-the-art refinery and the upgrading of two of three existing refineries to raise output and produce cleaner products. The 615,000 barrels per day refinery project was scrapped by the government more than two years ago, months after it awarded contracts to five Japanese and South Korean companies. Kuwait may require that part of the Al-Zour refinery be reserved for non-government investors, the chairman of state-owned Kuwait Oil Co., Sami Al-Rushaid, told reporters in London on June 22. The two projects are projected to raise Kuwait's refining capacity to 1.4 million barrels per day from the current 930,000 bpd. When the two projects are complete, Kuwait plans to shut the third of its three existing refineries. The council authorized the plan, along with proposals to upgrade two of the country's three existing refineries so that they can produce cleaner-burning fuels, the minister said. Kuwait is trying to attract more private investment to help pay for costly industrial improvements and infrastructure as part of a 30.8 billion-dinar development strategy to boost energy output and modernize transport links. “The public will own a minority share” in the new facility, and the ministry may also seek a foreign partner, Kamel Al-Harami, an independent oil analyst said in London. In its first phase, the new plant would be able to process 300,000 barrels a day of products for the domestic market, according to Al-Harami. The second phase, for 315,000 barrels a day, would replace output from Kuwait's oldest and smallest refinery at Shuaiba, which is planned for closure, and enable the country to be self-sufficient in refined products, the analyst said. Kuwait awarded construction contracts for the refinery in May 2008 to JGC Corp. of Japan and to South Korea's GS Engineering & Construction Corp, SK Engineering & Construction Co., Daelim Industrial Co. and Hyundai Engineering & Construction Co. The initial plan called for the refinery to start operating by 2012.
