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Cost estimated between $2.5 to 3 bln
KUWAIT CITY, Sept 17: The Kuwait Petroleum Corporation board of directors has approved the cancellation of a petrochemical project in Alberta, Canada, whose cost is estimated between 2.5 to 3 billion dollars, based on the decision of the Kuwait Petrochemical Industries Company’s board of directors, reports Al-Rai daily.
The sources said that the CEO of the Kuwait Petroleum Corporation, Sheikh Nawaf Al-Saud, directed from the beginning the necessity of reviewing all projects to ensure their feasibility before proceeding, whether implementing them or canceling them, as studies of the Canadian petrochemicals project confirmed through global events, starting with the corona pandemic and the change in gas prices, and what followed showed the project’s futility during the next stage, especially also because the Canadian partner will also exit the project after the feasibility studies changed.
The sources pointed out that the Petrochemical Industries Company is studying many alternative investment opportunities, which will be announced later, explaining that with regard to the equipment purchased for the Canada project, it is expected to be sold to reduce the losses that were spent on the project, estimated at 246 million dollars.
The sources indicated that the project aimed to produce 550,000 metric tons annually of polypropylene in Alberta, to be marketed by “Petrochemicals” in the global markets, while the mechanical work of the project was supposed to be completed by the end of next year. It is noteworthy that the project entered into force in February 2020, and its work was suspended indefinitely based on the decision of the KPC board of directors on December 30, 2020, in coordination with KIPIC, as a result of the repercussions of the corona pandemic, which was followed by the withdrawal of the first two loans with 1.7 billion dollars, and the second 150 million dollars, to finance the development, construction, operation, maintenance and ownership of the project, with the cancellation of some existing contracts.