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Kuwait has suspended a multi-billion joint petrochemical venture in Canada due to large losses resulting from work stoppage during the Coronavirus pandemic, a newspaper in the OPEC member reported on Tuesday.
The state-owned Petrochemical Industries Company (PIC) has suffered from a loss of nearly 71.4 million Kuwaiti dinars ($235.6 million) because of the stoppage in the project and the cancellation of two project loans of $1.7 billion and $150 million, the Arabic language daily Al-Qabas said, citing a report by the country’s State Auditing Office.
PIC agreed in 2019 to set up the joint venture in Alberta with Pembina Pipeline of Canada at an estimated cost of around $3.4 billion.
“The auditing reports showed that around $228.7 million has been spent until the end of the previous fiscal year on March 31, 2021,” the paper said.
“Due to the losses, PIC’s Board of Directors decided to suspend work in the project indefinitely and to abolish some contracts which had already been awarded.”
The paper said the Auditing Office asked PIC to “take measures to minimise losses”, adding that PIC Board decided to revise the project and present it to the Kuwait Petroleum Corporation, which manages the Gulf country’s hydrocarbon sector.
Reports in Kuwait said in 2019 that PIC and Pembina had shortlisted bidders for the project and that parts of it would be awarded later.
Pembina said in 2020 the two partners agreed to invest nearly 3.4 billion dollars for the construction of a propane dehydrogenation (PDH) plant and a polypropylene (PP) upgrading facility. The project will be owned equally by their joint venture Canada Kuwait Petrochemical (CKPC).
(Writing by Nadim Kawach; Editing by Anoop Menon)
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