Costs For Kuwait's Huge Al Zour Refinery Rise From $14 Billion To $19 Billion

[hatrack]

(MENAFN - The Peninsula) Kuwait's giant new Al Zour refinery could cost as much as $19bn, $5bn more than previously budgeted, as the country considers adding more units to the plant, a company official said yesterday. Rapidly rising costs in the energy industry have hit projects worldwide and already delayed the start-up date for the 615,000 barrels per day Kuwait refinery by more than a year.

"There is an intention to raise the budget to add more process units, it is under consideration," an official at Kuwait National Petroleum Company (KNPC), said. He declined to say what units may be added to the plant. Unlike most new refineries, Al Zour was planned as a relatively simple plant as the country needs to produce more fuel oil to burn for power generation.

Elsewhere, new refinery plans typically include more complex units to produce more transport fuels and reduce fuel oil output. Cleaner-burning natural gas has replaced fuel oil in much of the world's power generation, but Kuwait is short of gas and must rely on oil to meet rapidly rising power needs.

Kuwait plans to produce low sulphur fuel oil to limit the impact on the environment. The cost of building the desulphurisation units has played a part in driving up the refinery budget.

EDIT

http://www.menafn.com/qn_news_story_s.asp?StoryId=1093192425

[Oerdin]

1. It's the boom in Asia.

So much construction is occuring in China and India that the world price of construction materials has shot up to record levels.