Kuwait to scrap $14 bn refinery project

Kuwait is scrapping a $14 billion project to build a fourth refinery in the oil-rich country, the prime minister said in remarks published today.

The announcement was the second cancellation of a major oil project since December amid government corruption allegations.

Sheik Nasser Al Mohammed Al Sabah told Al-Watan newspaper that the decision, which the Cabinet will formally take tomorrow, was in compliance with results from an investigation by Kuwait's financial watchdog, the Audit Bureau.

He did not elaborate, but lawmakers have accused state officials of profiteering from the project because the contracts to build it did not go through the Central Bidding Committee. The Cabinet denies the accusations.

"We in the Cabinet are committed to the report of Audit Bureau about the fourth refinery, and we will officially stop the project in the next Cabinet meeting," he was quoted as saying.

The scrapping of the 615,000 barrels a day refinery, which included participation by Japan's JGC and South Korea's GS Engineering and Construction Corp, comes just months after Kuwait backed out of a $17.4 billion joint venture with US giant Dow Chemical Co in late December, just days before the petrochemical project was to be launched.