‘Extending contract of main contractor for bio-fuel project to cost KD 12.5 mln’
Strategic venture of National Petroleum Company
KUWAIT CITY, Feb 4: Minister of Oil and the State Minister for Electricity and Water Dr Khaled Al-Fadhel revealed that the cost of extending the contracts of the main contractor for bio-fuel project (Mina Abdullah) amounts to KD 12.5 million for a period of 10 months, noting the cost of extending the project’s consultant contract is KD 47 million, reports Al-Nahar daily.
In response to a question about the lost opportunities resulting from delay in the implementation of project, Al-Fadhel added the project is one of the strategic projects of the National Petroleum Company and aims to develop and expand the refineries of Abdullah and Ahmadi Ports to become an integrated refining complex capable of meeting the requirements of global and local oil markets.
Explained
Al-Fadhel explained that this opportunity is not actually realized except after operating all industrial units of the project and monitoring efficiency of its performance and the quantity/quality of production, which are subject to the demand and supply curve, with which the delay in implementing the project does not necessarily mean loss of opportunities due to the fact that the possibility of entering the global market is uncertain, and it’s not considered a lost opportunity for the company, given that gains are inevitably unlikely.
In his response to the cost of importing gasoline as a result of the great delay in completing the project, the minister said Kuwait National Petroleum Company and Kuwait Petroleum Corporation are in continuous coordination to import the gasoline product to meet the needs of the local market, pointing out that 1.256 thousand tons of the product worth $832.5 million were imported from April 2018 until the end of September 2019.
On the cost of financing the project, he said the first part from the local banks amounted KD 125.6 million, while the financing costs of the second part amounted to $454.3 million, indicating the sums represent all expenses, charges and fees required on loans, in addition to loan interests until September 2019. The change orders submitted to date amounted to KD 152.5 million, of which KD 115 million were approved, and KD 24.2 million are being studied.
On the delay in implementing the project, Al-Fadhel said the project was delayed due to reasons beyond the control of the National Petroleum Company and not related to mismanagement of the project, and fines will be applied until the responsibility and study of the claims are decided.