The Al Zour petrochemicals complex is a US$10 billion integrated petrochemicals scheme located beside the 615,000 barrel per day Al Zour refinery in southern Kuwait, and after years of stalled feasibility work it has changed hands. Kuwait Integrated Petroleum Industries Company was dissolved into Kuwait National Petroleum Company, a restructuring analysts expect to accelerate the long delayed project.

Al Zour Petrochemicals Complex Still Awaits Budget Approval

Movement is real but partial. Technology licensors have been chosen, unit contracts placed for cracking, polypropylene, propane and aromatics packages, and preliminary design started ahead of EPC tendering. The budget remains unapproved, a contrast with upstream Kuwait, where the Jurassic Light Oil export award to Larsen and Toubro cleared procurement in months.

Project Overview

• Project Name: Al Zour petrochemicals complex, also referred to as the Petrochemical Refinery Integration Al Zour project
• Location: Al Zour, roughly 90 kilometres south of Kuwait City, Kuwait
• Project Value: Estimated at US$10 billion to US$10.5 billion, per sources cited by Arab Times in June 2026
• Client and Owner: Kuwait National Petroleum Company, which absorbed the project after the merger that dissolved Kuwait Integrated Petroleum Industries Company
• Key Components: Main and auxiliary fluid catalytic cracking units, a polypropylene unit, a propane unit and a paraxylene and benzene unit, integrated with the adjacent refinery
• Planned Output: Close to 2.7 million tonnes a year of aromatics and polypropylene alongside about 1.7 million tonnes of petrol, per figures published by the former project manager
• Procurement Model: Technology licensor contracts already placed, with preliminary design running ahead of engineering, procurement and construction tenders
• Project Status: Pre final investment decision, with budget approval outstanding
• Main Contractor: Not yet awarded
• Strategic Impact: Supports the Kuwait Petroleum Corporation 2040 target of 14.5 million tonnes of petrochemicals a year and the national carbon neutrality goal for 2050

Project Team

• Client and Owner: Kuwait National Petroleum Company
• Former Project Manager: Kuwait Integrated Petroleum Industries Company, since dissolved into Kuwait National Petroleum Company
• Parent Corporation: Kuwait Petroleum Corporation
• Main EPC Contractor: Not yet awarded
• Technology Licensors: Selected, not publicly named
• Withdrawn Bidders: Fluor and SK Engineering and Construction, which exited the earlier bidding process

Reported 27th October 2023: The $10 billion Al-Zour petrochemicals complex projects will be on delay for a while as Kuwait still undertakes feasibility studies. The Kuwait Petroleum Corporation (KPC) chief executive Nawaf Al-Sabah said that the company has not made a final investment decision (FID) for the project. The chief executive also said that the Kuwait government has not yet offered a timeline schedule for when the project will be approved and tendered. “We are still studying the prospects of the project and have not yet taken FID on it,” said Al-Sabah. The project was first announced in 2006 but has never come to form ever since.

The fact that Kuwait Petroleum Corporation is taking more time on the feasibility studies looking at what products the Al-Zour petrochemical complex will produce may have various implications. One of these is the likelihood of exacerbating concerns that a radical overhaul of the project is being considered. That aspect placed in consideration will lead to longer delays before the main contracts are tendered and construction kicks off. In January, US-based engineering company Fluor and South Korea’s SK Engineering and Construction had withdrawn from the bidding process for the project.  The client on the project is KPC’s subsidiary Kuwait Integrated Petroleum Industries Company (Kipc).

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Al-Zour Petrochemicals Complex Project Will Create an Added Value In Kuwait’s National Resources.

Kuwait’s Investment in the petrochemical sector is prospected to create an added value from its national resources and create an industrial base that would help diversify its economy. In May 2019, KPC’s other subsidiary, state-owned Petrochemicals Industries Company (PIC) set out the country’s long-term petrochemicals strategy. The aim of PIC is to ensure that Kuwait exploits its full potential in the petrochemical sector. The construction of the Al-Zour Petrochemicals Complex will be one step closer to achieve this. The planned petrochemicals complex will be integrated with the Al-Zour refinery which has a capacity of producing 615,000 barrels per day. The refinery is expected to complete commissioning in the near future.