(MENAFN- Arab Times) The board of Kuwait Petroleum Corporation (KPC) recently approved the formation of a new company under the name 'Kuwait Petrochemical Refining Company' (KPRC) which will be responsible for three activities - the new Al-Zour Refinery which is currently under construction, a new LNG import terminal and a new petrochemical complex. It is yet to be approved by the Supreme Petroleum Council (SPC) but the approval is expected any time soon.
The new company is an addition to the other nine companies under KPC. It will be responsible for three different activities with three different partners/owners - the government of Kuwait, private sector and a new strategic petrochemical partner which will assist with its expertise in this field.
The new venture is worth about $30 billion € $16 billion for Al-Zour Refinery, $2.5 billion for the LNG terminal and $10 billion for the petrochemical complex.
Currently, the main obstacle is finding a strategic partner to invest in the petrochemical sector of this complex. How can new investors be encouraged, convinced or tempted to be a part of this new venture in Kuwait especially considering our bitter experiences in the near past of a number of project cancellations such as the development of the northern oil fields, the various postponements and delays in building new refinery, our experience with Shell Oil Company in developing free gas project and our bitter experience with Dow Chemical Company due to which we had to pay a hefty penalty of over $2.3 billion? It is indeed a very hard task.
KPC also has to close down and privatize its petrochemical arm € Petrochemicals Industries Company (PIC), which will result in the dismissal of more than 350 employees.
The challenges are immense but not impossible if KPC prioritizes its agenda and allots clear objectives. However, does it have sufficient qualified manpower to handle such a huge challenge?
The absence of a foreign investor in KPRC could either make or break the deal. Let us hope for the best while the oil prices are low along with other materials.
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