US embassy cable - 04KUWAIT4125

UNCLAS SECTION 01 OF 03 KUWAIT 004125 
 
SIPDIS 
 
USDOC:4520/ITA/MAC/OME/CLOUSTAUNAU/COBERG 
USDOC:3131/USFCS/OIO/ANESA/TGILMAN 
 
E.O. 12958: N/A 
TAGS: ECON, ELTN, EPET, ENRG, BEXP, KU 
SUBJECT: MAJOR PROJECTS WORTH BILLIONS OF U.S. DOLLARS ARE 
READY FOR LOCAL AND  INTERNATIONAL CONTRACTORS 
 
Following is a partial listing of key major projects for 
which U.S. firms may be especially competitive. 
 
Bubiyan Port 
------------ 
 
1. Name of Project: Bubiyan Port 
End-User: Public and private sectors jointly. 
Cost: $3.47 billion (over 30 years) 
 
Scope of Work: 
-Building 4 piers (platforms) by 2008 with a total one 
million containers/year capacity 
-Building 3 more piers by 2016 with a total 1.5 million 
containers/year capacity 
-Building 2 more piers by 2025 with a total 2.5 million 
containers/year capacity 
 
The Government of Kuwait will build the infrastructure and 
piers ($ 1 billion) while the private sector will build 
loading and unloading platforms, piers extending in the sea 
and will be in charge of the container platforms and 
transport systems such as railways, bridges, and express 
ways, if needed. 
 
Consultants: Booz, Allen & Hamilton Inc. (U.S.) and the 
Kuwaiti Company for Consulting & Investment (Kuwaiti) 
 
Status: The Council of Ministers formed a committee in 
November 2004 to follow up. The Minister of Public Works 
chairs the Committee with members including the Ministers of 
Energy and of Commerce and other relevant ministers.  The two 
consultants above are currently conducting the feasibility 
study. Design, financial studies and tender documents  will 
be completed next year. Actual work will start early 2006. 
 
Failaka Island 
-------------- 
 
2. Name of Project: Failaka Island Development Project 
End User: Kuwaiti Islands & Mega Projects Development Team 
Estimated Cost: $ 670 million 
 
Consultants: Systems Development & Project Management 
(Kuwait)  - ((Contact: Eng. Ali Kahil, General Manager)) and 
Hill International (U.S.) (( Contact: Mr. Akram Okaili, 
Director of Kuwait Projects)) 
 
Background: The project aims at rehabilitating Failaka Island 
to develop it into a landmark tourist attraction free of 
pollution. The project will include tourist, commercial and 
entertainment facilities. The project comprises three phases: 
preparing the infrastructure, housing phase, and the tourist 
phase. 
 
The end user announced the pre-qualification notice six 
months ago. The project will be submitted to pre-qualified 
companies for them to present their financial, economic and 
technical studies relevant to the project. The short list 
includes 7 companies at this time. 
 
Commercial option: BOT basis 
 
Status: TOR are completed and to be submitted by the end of 
2004. 
Bids will be submitted in 3/2005. 
Award: Expected in 8/2005. 
Commencement of construction: 10/2005 
Completion: Year 2010 
 
Jaber Al-Sabah Bridge 
--------------------- 
 
3. Name of Project: Jaber Al Ahmad Al Sabah Bridge (named 
after the current Amir), formerly called the Subbiya Bridge 
Project 
End User: Ministry of Public Works and Housing 
Estimated Cost: $ 1 billion plus 
 
Consultant: Cowi Company  (Danish) 
Length: est. 30 KMS (18 miles) 
Course: From Subbiya to the Al Ghazali Bridge across the bay 
 
Background: Ministry of Public Works selected the Danish 
consultant Cowi to conduct the feasibility study of the 
project and to determine its course. Cowi completed the study 
and offered several options for government to select from. 
Finally, it was agreed to link the bridge with Al Ghazali 
Bridge. 
 
Status: The pre-qualification bid for international designing 
contractors who have experience in building such bridges will 
be announced in December 2004. 
 
Funding: The project will be government-funded. 
Contact information: Mr. Abdulaziz Al Kulaib 
Undersecretary, Ministry of Public Works 
Tel: (965) 539 5526 
Fax: (965) 539-5448 
E-mail: aalkulaib@hotmail.com 
 
Fourth Refinery 
--------------- 
 
4.  Name of Project: a fourth refinery (without any specific 
name at this time) 
End-user: Kuwait National Petroleum Company (KNPC) 
Scope of work: Building a new refinery to increase Kuwait,s 
refining capacity about 30 percent by 2010. The study was 
completed in November 2004. Designs and the exact  technology 
will be selected later. The project will: 
--Increase the refining capacity of Al Ahmadi refinery by 
70,000 barrels/day up from the current 450,000 barrels/day; 
--Close the oldest refinery in Kuwait whose refining capacity 
is about 200,000 barrels/day; to be coordinated with the 
construction of this fourth refinery; 
--Modernize Mina Abdulla refinery whose current refining 
capacity is 270,000 barrels/day; and 
--Add crude processing units, transforming units, and 
hydrogen-treatment units most likely at Al Ahmadi Refinery. 
 
It is worth noting that the present refining capacity of the 
three existing refineries is 930,000 barrels/day, to be 
increased to 1.330 million barrels/day by 2010. 
 
Project Manager: Fluor Daniel (Project Management Services 
Contractor) 
For inquiries or information about this project, please 
contact: 
Mr. Bader Al-Sumait 
Manager, Corporate Planning 
KNPC, Kuwait 
Tel: ( 965) 244-3025 
Fax: ( 965) 242-9088. 
 
Crude Storage and Export Facilities Pier 
---------------------------------------- 
 
5.  Name of Project: Crude Storage and Export Facilities Pier 
End-User: Kuwait Oil Company (KOC) 
Cost: $ 850 million 
 
Scope of Work: The project aims at establishing storage and 
export facilities with a storage capacity of 11.4 million 
barrels. 
Status: Project was re-tendered. Eight out of 18 
pre-qualified companies participated in the bid, including 
three American companies (Bechtel, KBR, and Aker Kvaener). 
The closing date for submitting bids is February 17, 2005. 
The project, which was opened on an Engineering, Procurement, 
and Contracting (EPC) basis, comprises the following 
packages: general works, storage tanks, gravity lines, pumps 
and metering systems, and offshore works. Parsons Engineering 
did the preliminary design and engineering works. 
Point of contact: 
Mr. Farouk Al-Zanki 
Chairman & Managing Director 
Kuwait Oil Company (KOC) 
Tel:  965 3982929 
Fax:  965 3982233 
 
Modernization of KOC Facilities 
------------------------------- 
 
6.  Name of Project: Modernization of KOC Facilities 
End-User: KOC 
Cost: $800 million plus 
 
Scope of Work: Replacing existing oil and gas transporting 
lines in the south and southeast of Kuwait from underground 
to ground level to make fault detection and repair easier. 
The project also includes upgrading efficiency of 17 
gathering centers and three boosting stations. 
Status: Closing date for submitting bids and proposals was 
November 21, 2004. Five international companies from Italy, 
Korea, Japan, and the United States are competing for the 
project. 
Point of contact: 
Mr. Farouk Al-Zanki 
Chairman & Managing Director 
Kuwait Oil Company (KOC) 
Tel:  965 3982929 
Fax:  965 3982233 
 
Olefins II 
---------- 
 
7.  Name of Project: Olefins II Project (Equate II) 
End-User: Petrochemical Industries Co. (PIC) 
Estimated Cost: $ 1.4 billion 
 
Scope of Work: Building a complex to produce 850,000 
tons/year of ethane, 600,000 tons/year of glycol ethylene 
oxide, 400,000 tons/year of polyethylene, and 400,000 
tons/year of styrene. 
Status: Companies invited to bid for ethylene EPC contract 
should submit their proposals before January 16, 2005. Fluor 
was selected on November 20, 2004 to be the project manager. 
Societe General is the project,s financial consultant. The 
French Technip offers the technological services relevant to 
ethylene. 
 
Note: The project is a joint venture between PIC, Dow 
Chemical and a newly-established company (under incorporation 
now) called Al-Qurain that represents the private sector. 
 
Aromatics Plant 
--------------- 
 
8. Name of Project: Aromatics Plant 
End User: PIC 
Cost: About US$800 million 
 
Scope of Work: Building a new industrial complex to produce 
650 thousand tons/year of paraxylene and benzene. 
Status: Bechtel is the project manager. Six companies were 
pre-qualified for the EPC contract. Invitations to submit 
offers will take place in the last quarter of 2005. 
 
Al-Zour North Power Station 
--------------------------- 
 
9.  Name of Project: Al-Zour North Thermal Power Station 
End User: Ministry of Energy (formerly, Electricity & Water) 
Estimated Cost: $ 2.2 billion 
 
Project Consultant: Parsons Brinckerhoff (U.S.) 
Scope of Work: To design and construct a power station with a 
total capacity of 5 x 500 MWe units, and steam supply to a 
multi-system flash distillation plant (to be designed and 
constructed in a completely different tender by other firms) 
of 125 million imperial gallons per day capacity. 
Status: Pre-qualification announcement went out on June 21, 
2004. There have been three extensions of the closing date so 
far; the latest date is  December 4, 2004. After submitting 
proposals, 3-5 months are needed by the Ministry of Energy 
for study and evaluation. 
Point of Contact: 
Mr. Humoud Al Enezi 
Asst. Undersecretary for Power Plants 
Tel:  965 537 1772 
Fax:  965 537 1880 
LEBARON