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Bidders are 43% over budget for Kuwait oil project

21 May 2025

 

The lowest bid for the contract to develop a new fuel depot in Kuwait’s Al-Mutlaa area came in 43% above the project’s target budget, according to industry sources.

One source said: “Five months have passed since bids were submitted and there is still a lot of uncertainty about this project due to the lowest bid coming in way over the proposed project budget.”

The client on the project is state-owned downstream operator Kuwait National Petroleum Corporation (KNPC).

Lebanon’s Consolidated Contractors Company (CCC) submitted a low bid of KD357.3m ($1.16bn) for the project ahead of a deadline on 22 December last year, but the project has still not been approved by KNPC’s parent organisation, Kuwait Petroleum Corporation.

Five companies submitted bids for the project, with only KD1.1m ($3.6m) between the two lowest prices.

The bidders are:

  • CCC (Lebanon) – KD357.3m
  • Sinopec Luoyang (China) – KD358.4m
  • Heisco (Kuwait) – KD384.5m
  • Larsen & Toubro (India) – KD413.7m
  • Open Tower General Trading & Contracting Company (Kuwait) – KD505.5m

The scheme is known as the Al-Mutlaa New Fuel Depot project and its scope is expected to include:

  • Development of new pumping facilities at the Mina Al-Ahmadi and Shuaiba refineries
  • Laying of cross-country pipelines from the Mina Al-Ahmadi and Shuaiba refineries
  • Construction of a local market depot
  • Installation of safety systems
  • Installation of fire-fighting systems
  • Construction of storage tanks

Ahead of the main contract being tendered, there were long-running debates within KNPC about the types of fuel that will be transported to the depot.

The facility will store fuels for distribution within Kuwait.

Some officials wanted fuel that does not meet European import standards to make up a high volume of the fuel transported to the facility, so that more export-quality fuel can be sold to foreign markets.

Other officials wanted the European-standard fuel to be used more widely in Kuwait due to its lower environmental impact.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13921727/main.png
Wil Crisp

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