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Refinery project scrapped

Refinery project scrapped
South Korean firms involved in deals worth a total of 6.3 billion dollars to build a refinery in Kuwait said the contract has been scrapped.

South Korean firms involved in deals worth a total of 6.3 billion dollars to build a refinery in Kuwait said the contract has been scrapped.

South Korean firms involved in deals worth a total of 6.3 billion dollars to build a refinery in Kuwait said Friday they have been notified the contract has been scrapped. The companies said they had been informed by state-run Kuwait National Petroleum Co of the decision. ?So far, we weren"t told the reasons for the cancellation,? an official at Hyundai Engineering and Construction told Dow Jones Newswires.

A contract worth four billion dollars to build the refinery"s main units was awarded last May to a consortium of Japan"s JGC Corp and Korea"s GS Engineering and Construction.

Hyundai secured a 1.12 billion contract for offshore facilities, while Daelim Industrial and SK Engineering and Construction received contracts worth 1.184 billion and 2.06 billion dollars respectively.

GS Engineering also said in a regulatory filing it was told the contract was scrapped.

The emirate"s prime minister said in comments published Sunday that plans for the new refinery, costing a total of 15 billion dollars, would be scrapped because an independent watchdog had decided it was not feasible.

?The government is committed to the Audit Bureau report, and the council of ministers will officially halt the project at its next meeting,? Sheikh Nasser Mohammad al-Ahmad al-Sabah told Al-Watan daily.

Kuwait last May awarded the contracts to build the 630,000-barrels per day refinery to the South Korean companies and the Japanese firm and later signed letters of intent with them.

The deals prompted a dispute between the government and opposition MPs who alleged the bidding process and awarding of contracts were flawed.

MPs said the contracts should have been awarded through the state-run Central Tenders Committee to ensure transparency, and vowed they would quiz the oil minister if the contracts were signed.

In August the Gulf state"s government referred the project to the Audit Bureau for an investigation.

Though its report was not published, local media and MPs said the bureau concluded that the project was technically and economically not feasible.

In December Kuwait scrapped a 7.5-billion dollar partnership with US Dow Chemical after pressure from MPs, citing its high cost amid the global economic downturn.

www.TurkishMaritime.com.tr

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