UPDATE 1-Foster Wheeler signs Kuwait fuel project contract
KUWAIT Dec 19 (Reuters) - Engineering company Foster Wheeler said on Wednesday it had signed a contract with Kuwait to manage and service a clean fuels project at two refineries in the Gulf Arab state in a deal worth around $500 million.
The project at the Mina al-Ahmadi and Mina Abdullah refineries forms part of Kuwait's four-year development plan announced in 2010. Implementation of the plan has been delayed in part to political turmoil in the OPEC member state.
Kuwait plans to spend a total of 4.6 billion Kuwaiti dinars ($16.4 billion) on the clean fuels project to upgrade and boost capacity at the refineries.
Foster Wheeler, whose operational headquarters are in Switzerland, signed the project management and consultancy contract with state-owned Kuwait National Petroleum Company (KNPC). Foster Wheeler said it expects the project to be completed in the second quarter of 2018.
It said it would book the revenue value in its fourth-quarter earnings. Kuwaiti media reported in August that Foster Wheeler was KNPC's choice.
The upgrade work will increase the amount that the refineries can process per day by 264,000 barrels to 800,000, the company said in a statement.
It aims to increase the conversion of fuel oil into higher-value products, Foster Wheeler said. Demand for these products is expected to grow due to tighter specifications for transport fuel.
Kuwait is also planning to spend around 4 billion dinars on building a new oil refinery, Al Zour, which aims to be the largest in the Middle East. Both projects, if completed, could help restore confidence in Kuwait's economic management.