Kuwait cancels second refinery project with Fluor

Mar 21, 2009 01:00 AM

Kuwait National Petroleum has asked Fluor Corp to stop working on a huge refinery project, the US engineering and construction company said. It said the remaining $ 2. bn in work would be removed from first-quarter backlog.
Kuwait National Petroleum (KNP), a unit of state-owned Kuwait Petroleum Corp, told Fluor to stop work on the utilities and offsites for the now-cancelled al-Zour refinery. Fluor had been serving as the overall project manager, spokesman Keith Stephens said. The 300 workers engaged in engineering work on the project will be reassigned, he said.

KNP's termination of the project is the second cancellation of a major oil project since December amid allegations of corruption. In December, Kuwait backed out of a $ 17.4 bn joint venture petrochemical project with Midland, Michigan-based Dow Chemical.
Originally, KNP had planned to spend about $ 14 bn on the 615,000 bpd al-Zour refinery. It would have been the nation's fourth refinery, with commissioning planned for 2012. It was reported that Kuwait planned to scrap the project, citing the emirate's Prime Minister Sheikh Nasser al-Mohammed al-Sabah.

The country notified South Korean builders of the cancellation, saying the refinery is no longer economically viable as oil prices have fallen more than 50 % from their peaks.
Fluor said in February that 2008 year-end backlog was $ 33.2 bn, a 10 % increase from 2007.

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