Kuwait Oil Min to face MP questions over refinery

By Ulf Laessing

KUWAIT, Sept 15 (Reuters) - Kuwait's oil minister will face another round of questioning when he briefs a parliamentary committee on Tuesday about tenders for a giant oil refinery project some politicians say broke the law.

It is the second time that Mohammad al-Olaim has been summoned to parliament in a two-month-old row over the awarding of contracts in a $15 billion tender to build the 615,000 barrels per day al-Zour refinery.

Olaim has already won support from a state committee that scrutinises such cases, and the government has referred the project to the state audit bureau for approval before the contracts are finally signed.

But Olaim must now answer questions from parliament's financial committee which has invited all 50 deputies to attend.

Deputies from the Popular Action bloc have said that, among other issues, the government should not have awarded U.S. firm and project manager Fluor Corp (FLR.N) a contract for utility and offsite services for the refinery without a tender.

State refiner Kuwait National Petroleum Co (KNPC) awarded the other contracts, including a package worth $4 billion to build crude distillation units for Japan's JGC Corp (1963.T) and South Korea's GS Engineering and Construction Corp, after a tender.

"The government has been indecisive. They should have gone ahead with the project without listening to all of this if they think they everything is right," said Ali al-Baghli, a former oil minister.

The Popular Action bloc says it is considering calling Olaim for questioning before the whole house, a move which could lead to a no-confidence vote and has in the past prompted cabinet ministers to resign.

"Some deputies want to verify the contracts, others are against it because they have other interests," said Baghli, a political analyst.

The Kuwaiti parliament has a history of challenging the government. The last parliament focused on questioning ministers, prompting several resignations and delaying key economic legislation until a new election was called on May 17.

Kuwait plans to boost refining capacity to 1.415 million bpd from around 930,000 bpd with the new plant and upgrades to two other refineries. Al-Zour is scheduled to start operating in 2012, two years later than initially planned.

(Reporting by Ulf Laessing; Editing by Lin Noueihed)