LOC16:29
13:29 GMT
KUWAIT, March 3 (KUNA) -- 2014 was a very successful year for Kuwait's projects market as project activity was among the fastest expanding in the region, with Kuwait awarding KD 7.3 billion (USD 25 billion) worth of development contracts, an economic report showed.
This was almost four times as much as in 2013 and more than the last three years combined. The total value of Kuwait's projects market (planned and active projects) is estimated to be in the region of KD 64 billion (USD 220 billion), said the report released by the National Bank of Kuwait (NBK).
With at least KD 14 billion (USD 48 billion) worth of projects due to be awarded this year, the authorities will be hoping to capitalize on the momentum achieved in 2014 and finally gain some traction on rolling out the country's development plan, it added.
Last year, the authorities introduced a new law to regulate all public private partnerships (PPP), which, it is hoped, will accelerate the involvement of the private sector in Kuwait's projects market. Under the new law, the Partnerships Technical Bureau (PTB) will be superseded by the Kuwait Authority for Partnership Projects (KAPP).
To that end, following the release of Kuwait's new 5-year development plan (2015-2020) in the summer of 2014 and the recently announced annual plan for the 2015/16 fiscal year (FY15/16), 30 projects of strategic and economic importance have been earmarked for investment spending of KD 6.6 billion (USD 22.4 billion) during the next fiscal year, it said.
Capital expenditures are likely to increase on the previous budget, albeit marginally, to KD 3.1 billion (this also includes capital spending on items unrelated to the development plan and excludes items normally accounted for off-budget, such as capital spending on the oil and gas sector), it added.
2014 was a momentous year for Kuwait's all important oil and gas sector. Two high profile projects, the KD 4.0 billion (USD 13.6 billion) New Refinery project (Al-Zour) and the long-delayed KD 4.6 billion (USD 15.6 billion) Clean Fuels project finally received the go-ahead, with contracts signed to commence work on some of their constituent packages. Total contracts awarded in the sector reached KD 4.8 billion (USD 16.3 billion), which represented more than 60 percent of all contracts awarded (by value) during the year, the report noted..
In March, Kuwait National Petroleum Company (KNPC), the downstream operating arm of state-owned Kuwait Petroleum Corporation (KPC), awarded a KD 194 million (USD 660 million) contract to commence soil reclamation at the site for the new refinery. Then in April, KNPC awarded three contracts totaling KD 4.6 billion (USD 15.6 billion) for the Clean Fuels project (packages 1 & 2 for Mina Abdullah as well as the Mina Al-Ahmadi package).
The two mega projects are scheduled for completion in 2018-19, after which two of the country's existing three refineries, Mina Abdulla and Mina Al-Ahmadi, will see their combined refining capacity expand to 800,000 barrels per day (b/d) from the current 730,000 b/d while the third, the Shuaiba refinery, will be decommissioned. With the new refinery at Al-Zour, Kuwait's refining capacity should double to 1.4 mb/d.
In upstream operations, Kuwait Oil Company (KOC) awarded three contracts worth KD 678 million (USD 2.3 billion) for gathering centers (nos. 29, 30, 31). KOC also awarded a KD 280 million ($952 million) contract to Dubai-based Dodsal to build an effluent water treatment and injection plant in northern Kuwait, the NBK report said.
Auguring well for the rest of the year, KOC awarded in January the contract for the Lower Fars Heavy Oil (LFHO) production facility, another project of strategic importance. The first phase of the LFHO project has a production target of 60,000 b/d of heavy crude by 2018. Once complete, the project should deliver about 270,000 b/d by 2030. The KD 1.1 billion contract was awarded to the UAE-based Petrofac and the Athens-based Consolidated Contractors Company, it added.
More than KD 6.5 billion (USD 22.1 billion) in oil and gas contracts are expected to be signed this year, with packages 1-5 of the New Refinery project (Al-Zour), worth KD 3.4 billion (USD 11.6 billion), likely to dominate the awards.
In 2014, KD 1.7 billion (USD 5.8 billion) worth of construction sector contracts were signed, equivalent to 24 percent of all contracts awarded during the year. Expansions at Al-Sabah, Farwaniya, and Al-Adan hospitals totaled KD 678 million (USD 2.3 billion).
Following on from the award of phase 1 of the KD 2.4 billion (USD 8.1 billion) Al-Zour North IWPP in 2013, Kuwait awarded KD 283 million (USD 962 million) worth of power sector-related contracts in 2014. Notably, the KD 13 million (USD 44 million) contract for phase 1 of the Shagaya Renewable Energy Complex, a joint venture between the Ministry of Electricity and Water (MEW) and the Kuwait Institute for Scientific Research (KISR) was awarded. The complex will produce 70W of renewable (solar & wind) energy, the report concluded. (end)
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