S. Korean companies secure multi-billion dollar building

By 정주원
  • Published : Feb 12, 2014 - 16:14
  • Updated : Feb 12, 2014 - 16:21

South Korean companies on Wednesday said their consortium won a multi-billion dollar oil refinery and petrochemical plant project in Kuwait.

The project, ordered by the Kuwait National Petroleum Co., is for an update of eco-friendly production systems at the existing Mina Al Ahmadhi and Mina Abdullah facilities so that sulfur content of petroleum products will fall under 5 percent when

work is completed. The $12 billion Clean Fuels Project, moreover, calls for the expansion of combined oil refining capabilities from 715,000 barrels to 800,000 barrels per day.

The five South Korean businesses taking part in the CFP have won around $7.1 billion worth of orders, or 69 percent of the total.

The $4.82 billion MAA order was secured by a consortium made up of GS E&C, SK Engineering and Construction Co., and Japan's JGC Corp.

All three partners have equal stakes in the work, which is one of a three-part development "package" being pursued by the Middle Eastern nation.

The partners expect to start the project in March and complete it by November 2017.

GS will handle the hydrogen production unit and gas oil desulfurization, while SK will build the sulfur recovery unit and the delayed coking unit.

Company officials said they will be in charge of design, purchasing and construction work as well as carrying out trial runs for the project that will be undertaken 45 kilometers south of Kuwait City.

"GS and SK have extensive experience in overseas works, with the latest deal highlighting the importance of working together for a common goal," a GS press release said. It pointed out that the contract clearly shows the benefits of companies working with each other.

In the past, South Korean companies engaged in cutthroat competition against each other that resulted in securing orders despite losses.

Samsung Engineering Co., another major builder, said it was awarded the No. 1 MAB package worth $3.8 billion as part of a joint venture with Britain's oilfield service provider, Petrofac and CB&I. It said Samsung holds a 43 percent share in the tie-up, with Petrofac's stake reaching 47 percent.

It said its part in the 45-month-long building process is to set up a crude distillation unit and hydrocracker facilities.

South Korea's Daewoo Engineering and Construction Co., which formed a tie-up with Hyundai Heavy Industries Co., and U.S.-based Fluor, a leading engineering and construction company, also said it won the No. 2 MAB building package worth $3.4 billion.

This package is part of the CFP work as well.

"Compared to the other three packages, the one won by Daewoo requires a considerable degree of expertise," a company insider said. Work could start as early as next month, with the project taking 45 months to complete, he added. (Yonhap)