Takreer works on Ruwais refinery expansion

Abu Dhabi Oil Refinery Company (Takreer) is working on a cost estimate to expand its 400,000 barrel-a-day Ruwais refinery and expects to start issuing tenders for the work in June.

Takreer is carrying out initial design and engineering work that is expected to be completed in June, General Manager Jasem Ali Al Sayegh said at a conference in Abu Dhabi yesterday. Contracts are set to be awarded by the end of this year.

The refiner plans to add 417,000 barrels a day of capacity at the Ruwais refinery and is working on doubling capacity at a 600-megawatt power plant at the facility.

Takreer is going ahead with all its expansion projects as construction and engineering costs have fallen by about 30 per cent to 40 per cent from their peak in recent years, Al Sayegh said.

Takreer is hoping falls in commodity and raw material prices will cut its cost base on new projects by up to 40 per cent.

But the company has no plans to cut either spending or projects due to the lower oil price or tight credit markets, Sayegh said.

"We are proceeding with projects as planned and on schedule," Sayegh said.

"All our projects are self-financed and fully secured... In fact, we see opportunities in the current environment to save 30 per cent to 40 per cent on proposed capital costs."


Knpc cancels letters of intent

Kuwait National Petroleum Company (KNPC) yesterday said its new refinery project was still on but letters of intent, or LoIs, signed with contractors last year had been cancelled.

"The project is still standing. The LoIs have been terminated," Abdulla Fahad Shabeeb Al Ajmi, who heads KNPC's Clean Fuels Project 2020 that aims at upgrading two existing refineries in Kuwait, told the 10th Middle East Refining Conference in Abu Dhabi.

The fate of the $15 billion (Dh55.5bn) refinery project was in doubt after the former prime minister of the oil-rich Gulf state ordered its cancellation last week. On Friday, national refiner KNPC informed contractors that it had cancelled the letters of intent signed last year with the South Korean, Japanese and US companies for different construction packages.

The project will now be re-evaluated by the Supreme Petroleum Council, which oversees Kuwait's oil interests, taking into consideration a report drawn up on the project by the State Audit Bureau, the accounting watchdog, Al Ajmi said.

"The project will eventually have to prove itself in terms of feasibility," he said, adding that the report also observed "uncertainty on the solicitation of EPC, or engineering, procurement and construction, services".

The project came under scrutiny after opposition members of parliament alleged that KNPC's contract awards did not comply with the tender procedures.

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