Ports Sector Kuwait

An Expert's View about Sea, Coastal and Inland Water Transport in Kuwait

Posted on: 5 Oct 2010

Kuwait is strategically positioned at the mouth of waterways to Iraq and Iran, giving it the advantage to serve as a regional hub for shipping and transportation activities.

Ports Sector Summary - Kuwait Sector Report Ports Sector Kuwait Produced by: Elvis Noronha, Trade & Investment Advisor, British Embassy, Kuwait Last Revised February 2010 Whereas every effort has been made to ensure that the information given herein is accurate, UK Trade & Investment or its sponsoring Departments, Business, Innovation and Skills (BIS) Foreign and Commonwealth Office, accept no responsibility for any errors, omissions or misleading statements in that information and no warranty is given or responsibility is accepted as to the standing of any firm, company or individual mentioned. www.uktradeinvest.gov.uk Ports ? Kuwait Table of Contents OVERVIEW 3 CHARACTERISTICS OF MARKET 3 OPPORTUNITIES 7 KEY METHODS OF DOING BUSINESS 8 MORE DETAILED SECTOR REPORTS 9 PUBLICATIONS 10 EVENTS 10 CONTACTS LISTS 11 www.uktradeinvest.gov.uk Page 2 of 11 Ports ? Kuwait OVERVIEW The land area of Kuwait is about 17,818 sq. kms and has nearly 500 kms of coastline along the Arabian Gulf. Kuwait is strategically positioned at the mouth of waterways to Iraq and Iran, giving it the advantage to serve as a regional hub for shipping and transportation activities thus its ease of access to S. Arabia, Iraq and Iran makes it an ideal choice as a major trading centre. CHARACTERISTICS OF MARKET Kuwait's economy is heavily dependent on oil revenues which account for almost 50% of GDP, more than 80% of government revenues and over 90% of export earnings. The surge in oil revenue that Kuwait has enjoyed in the last few years has fuelled strong growth that has cascaded to other sectors which the government is keen on sustaining. The government in its attempt to diversify its economy from the dependence on oil revenue and assuring its future prosperity is looking to position the state as a regional trade and finance centre competing with countries such as UAE, Qatar and Bahrain. The development and expansion of the state?s transport infrastructure which are currently underway is a step in this direction. www.uktradeinvest.gov.uk Page 3 of 11 Ports ? Kuwait Kuwait Ports Infrastructure Kuwait has three commercial ports which are an integral part of its transport network. The three ports ? Shuwaikh, Shuaiba and Doha are operated by Kuwait Ports Authority (KPA), a public sector body run on a commercial basis under the authority of the Ministry of Communications. Shuwaikh port is considered the main commercial port for Kuwait. The port has a total land area of 3.2m sq.meters and 1.2m sq.meters water basin area. The port has 21 berths of which 14 berth have 10meters depth, four with 8.5 meters depth and three berths with 6.7meters depth. The total length of all berths is 4,055 meters. The vessels traffic to and from the port passes through a Navigation Channel dredged inside Kuwait Bay. The length of the channel is around 8kms with a depth of 8.5 meters at minimum water tide level. The Port can receive vessels of 7.5meters draft at any tide condition and vessels of 9.5meters draft at high tide. Shuwaikh?s container terminal (SCT) covers an area of 26 hectares and is used for both exported and imported containers. Shuwaikh has a ship repair facility, which is run by HEISCO situated off berth 2 measuring 190meters by 32meters. The floating dry dock can accommodate vessels upto 35,000 tonnes deadweight. Located 45 kms south of Kuwait city, Shuaiba port is Kuwait?s second most important commercial port. The port has 20 commercial and container berths as well as an oil pier (which is operated by Kuwait National Petroleum Co). The oil pier has a depth of 16 meters. Shuaiba has an extensive conveyor network for handling bulk petrochemical exports, as well as several modern workshops for maintenance of marine harbour craft and other equipment. The port has two basins for small craft and barges. The craft basin has a depth alongside of 4meters and comprises three piers. The barge basin has a depth of 6meters and offers four piers ranging from 157meters to 287meters in length. Most of Kuwait?s maritime trade is carried out through the ports of Shuwaikh and Shuaiba. Between the two ports, they have cargo handling capacity of 1.2m TEU. Doha port, located to the North of Kuwait City is the smallest of Kuwait Ports Authority (KPA) ports with a depth of 4.3 meters. The port is used to berth dhows, barges and small coastal vessels. The port offers nine piers covering over 2,500 meters of quay length. The port contains warehousing facilities that covers an area of 8110 sq. meters and cattle pen of 3250 sq. meters area. www.uktradeinvest.gov.uk Page 4 of 11 Ports ? Kuwait Oil Terminals Kuwait National Petroleum Company (KNPC), a subsidiary of KPC, operates the country?s refineries and associated export facilities. KNPC?s three refineries are: Mina Al-Ahmadi, Mina Shuaiba and Mina Abdulla. Kuwait has a well-developed infrastructure for exporting crude oil, refined products, and LPG for which it has four oil terminals located near its refineries. The largest are Mina Ahmadi and Mina Abdullah. The others are at Shuaiba and at Mina Saud (Al Zour) in the Divided Zone. Mina Al-Ahmadi handles most of Kuwait?s petroleum exports. Twelve offshore berths can load more than 2 million bpd of oil for which it can accommodate large oil tankers. Mina Al-Ahmadi has four facilities. The south pier has eight berths varying in depth from 12 to 15 meters. The north pier has four berths with a depth of about 18 meters and can handle tankers with a cargo of up to 100,000 tons. The artificial sea-island, which could handle 375,000 ton tankers, consists of a loading platform with six docking platforms in almost 30 meters of water. The pier at Mina Shuaiba has four berths and can receive tankers up to 100,000 tons. Mina Abdulla has an artificial sea-island in 13 to 17 meters of water and an off-load capacity of 214,000 tons. Mina Al Zour (Mina Saud) is an oil terminal, loading crude from the southern oil fields. It can accept vessels upto approximately DWT 140,000 for loading full cargo and up to approximately DWT 370,000 for loading part cargo. Maximum draught allowed is normally 15.85 meters (52 feet). Bubiyan Port Project With an area of 860 sq. kms, Bubiyan is the largest of Kuwait?s islands. The island?s central location at the mouth of waterways to Iraq and Iran will provide the port with the potential to serve as a major deep-sea staging area for regional shipping and transportation activities. Upon completion Bubiyan port will provide easy access to Umm Qasr and also link Iraq, Iran and Saudi Arabia via a planned rail network. The cost of the Bubiyan port project is estimated to be around $4 billion, which is a component of a larger $85 billion ?Silk City? plan. The development of the port will be executed in four phases over the next 16 years and, once completed, will have a planned capacity of 3.5million twenty-foot equivalent units (TEUs). www.uktradeinvest.gov.uk Page 5 of 11 Ports ? Kuwait Work on the first Phase began in 2007. The first Phase of the project has been divided into three different implementation stages. Stage one comprises construction of roads and bridges, soil processing, in addition to designing and maintenance of roads and railway. Stage two involves designing and establishing 16 anchorages. The last stage of phase one involves expansion of the port to a depth of 20 meters, to accommodate larger vessels in order to conform to international maritime accords. The three stage project is planned to be completed by 2014, transforming the island into a marine transport hub with a major sea port together with tourist resorts and nature reserve. Phase Two of the project is planned from 2016 to 2021, which will encompass expansion of facilities. Phase Three is planned to begin in 2023 and is expected to take 60 months for completion. The work will involve establishing additional 8 anchorages. In addition, 36 more anchorages will be constructed in Phase Four starting 2033, giving the port a total of 60 anchorages. There are also plans for the construction of residential complex on the island in addition to recreational and entertainment resorts. As part of the Ministry of Public Works overall plan for the support of the island project, the plan includes construction of a bridge to connect to Subiya city, which is in addition to Jahra-Subiya causeway as well as Jaber Al Ahmed Bridge. Current Development The first phase of the Bubiyan Island work began in 2007 and involves soil treatment and the construction of roads and bridges. The estimated cost of stage one of the first phase is around US $411 million (KD118 million). The Ministry of Public Works?s ?Mega Projects Agency? (responsible for large scale projects) signed a deal with the China led consortium - China Harbor Engineering Company which also includes local companies - Shaheen Al Ghanim Road and Bridges and Gulf Dredging Co. This stage of the project will focus on the initial construction and development of the port's infrastructure. However, work on the first stage of the project has moved at a painstakingly slow pace with less than 2% of the development completed in the past two years. The contract involves the construction of a 34-kilometre-long road and bridge to the port. www.uktradeinvest.gov.uk Page 6 of 11 Ports ? Kuwait The first phase of the overall project is meant to increase accessibility to the island's port and was scheduled to take around 42 months. The Bubiyan port project has witnessed some complications in the progress of the project as there was change in the overall programme management consultant, US-based Hill International who were replaced by Louis Berger. Stage two works will comprise three design-and-build packages covering dredging, quaywall construction and onshore roads and paving. This stage (2010-2014) of phase one includes the design and construction of the port itself. The design-and-build contract covers the construction of a container terminal, four berths and a 1,300-metre-long quay wall, in addition to port buildings and utilities, digging and soil improvement works and site levelling. Bidding for stage two was postponed to January this year and the winner of the bid is a partnership between South Korea?s Hyundai Engineering and Construction and local Kharafi Group. The winning bid is believed to be $1.14 billion (KD328 million). The scope of the work will include building of port with capacity of 16 anchorages. The work includes design-and-build that covers the construction of the container terminal, berths and quay wall, plus port buildings and utilities, digging and soil improvement works, and site leveling. Stage three of Phase One encompasses marine drilling for work such as extending the basin, widening the channel, and will include constructing building yards and providing other services needed. Originally, the port project was due to open by 2009 but delays over the build-operate-transfer scheme have pushed back completion dates. The first three-container berths, originally due to come online in 2009, has been postponed, with the following five berths similarly delayed. OPPORTUNITIES The Bubiyan port and the privatisation of the existing ports has the potential to provide a number of opportunities to the UK Maritime and Port Industry. The Bubiyan port is Kuwait?s most ambitious project, aimed at transforming Kuwait into a regional trading hub. Given the scale and complexity of the project, expertise will be required during the construction and operational stages. The operational management for the Bubiyan port is expected to be awarded to a private consortium. Currently there is discussion for setting up an Authority for the management of the port. Opportunities include the supply of equipment, safety and security, software and solutions, training and logistics services. The overall plan for the Bubiyan Island also involves setting up a free trade zone, recreational centres and tourist resorts thus creating a number of opportunities in other sectors. The Island project also includes the construction of desalination plant and power station. www.uktradeinvest.gov.uk Page 7 of 11 Ports ? Kuwait The Bubiyan port is not the only maritime project the country has to offer, the government is looking to expand and enhance the existing ports infrastructure. Kuwait's existing container terminals at Shuwaikh and Shuaiba have seen an upsurge in demand due to the rapid expansion of the local economy and their strategic location for Iraq-bound freight. The facilities at Kuwait?s ports have not been amongst the most developed in the region, and have suffered from bureaucracy and insufficient focus on infrastructure. However, Kuwait Ports Authority (KPA) has been working to boost the efficiency and capacity of the Shuwaikh and Shuaiba Ports. New gantry cranes and yard equipment, redevelopment of stacking areas, and installation of enhanced computer systems are in the pipeline, in addition to the deepening and widening of the approach channel to allow larger ships to use the terminals. Shuaiba Port will see further investment in its infrastructure. Kuwait invited international consultants to draw up a masterplan to redevelop and expand Shuaiba port, which will provide a number of opportunities. There are also plans for KPA to develop Doha port to handle more commercial cargo as the port is endowed with ample space for the expansion of warehousing and cargo handling facilities. There have also been unconfirmed reports that KPA may look to privatise its ports for which international operators will need to be invited. It is expected that special purpose vehicles will be set up to manage the three port facilities namely Shuwaikh, Shuaiba and Doha, which will be able to bring in international partners to manage and operate the terminals and invest in the ports' infrastructure. Kuwait Oil Co has plans for constructing a sea port which will be built 300 meters from the shore onto the sea and will stretch about 140 meters along the shoreline. KEY METHODS OF DOING BUSINESS Kuwait's Commercial Companies Law provides for the establishment of the following types of companies and ventures. ? Limited liability company ? Shareholding company ? Partnership ? Joint venture ? Commercial agency ? Branch All the above, with the exception of 'joint venture' possess a separate legal identity. www.uktradeinvest.gov.uk Page 8 of 11 Ports ? Kuwait UK companies wishing to do business in Kuwait are advised to operate through a local agent or j/v partner. This is especially required for Government contracts. A local agent or partner will be more finely attuned to the local business environment and therefore, best suited to deal with complicated issues that may arise. The agent/partner can facilitate the required registration on approved supplier lists of appropriate government entities and companies. Choosing the right agent/partner and formulating an equitable agency agreement is therefore a critical element in doing business in Kuwait. When considering doing business in Kuwait, it is essential to obtain business, legal and financial/taxation advice. The Trade & Investment section at the British Embassy can assist in identifying an appropriate local representative. For further details on commissioning our services or obtaining further information on Kuwait's agency law and tendering procedures, kindly contact the Embassy Or UK Trade & Investment (UKT&I) Kuwait Desk at Kingsgate House, 66-74 Victoria Road, London SW1E 6SW, tel. 0207 215 4949, Contact Mr Carl Bruce, email carl.bruce@ukti.gsi.gov.uk MORE DETAILED SECTOR REPORTS Research is critical when considering new markets. UKTI provides market research services, which can help UK companies doing business overseas including: ? Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, and support during your visits overseas ? Export Marketing Research Scheme. In-depth and subsidised service administered by the British chambers of Commerce on behalf of UKTI Contact your local International Trade Advisor if you are interested in accessing these services, or for general advice in developing your export strategy. For more information on the ports sector contact : Jason Castelino -Deputy Head, Ports UK Trade & Investment Kingsgate House 66 - 74 Victoria Street London SW1E 6SW Tel: 00 44 (0) 207 215 8383 E-mail: jason.castelino@uktradeinvest.gov.uk www.uktradeinvest.gov.uk Page 9 of 11 Ports ? Kuwait The British Embassy - Trade & Investment Section, Kuwait Tel. 00 965 2259 4367 Fax 00 965 2259 4368 Email : elvis.noronha@fco.gov.uk Contact : Mr Elvis Noronha, Trade & Investment Officer PUBLICATIONS ? "Middle East Economic Digest", MEED, www.meed.com, published by MEED, 33-39 Bowling Green Lane, London EC1R ODA United Kingdom EVENTS ? Ship & Port Dubai 2010 www.shipport.info (Dubai) May 24 ? 26 4th Ship & Port Dubai, the International Maritime Exhibition and Conference is tailor-made for international companies to foray into these markets. Ship & Port Dubai offers you an excellent platform to showcase your ?state of the art? products and services to the most qualified visitors of the Middle East region. ? Trans Middle East 2010 www.transportevents.com (Egypt) 23-24 November Trans Middle East is the largest annual Ports, Shipping and Transport Logistics Exhibition and Conference trade event in the Middle East - now in its 6th year UK TRADE & INVESTMENT SAUDI ARABIA & KUWAIT PORTS INWARD MISSION: 18-21 OCTOBER 2010 After a successful ports trade mission to Saudi Arabia and Kuwait in October 2009 UK Trade & Investment will be inviting senior decision makers to the UK including those involved in the Bubiyan Port project to meet UK companies. UK companies will have the opportunity to attend an open event to meet the delegation and hear about latest developments, attend a welcome dinner or request one to one meetings with specific members of the delegation. For those active in the market UK Trade & Investment would be happy to receive suggestions of influential people in the Ports sector in Saud Arabia and Kuwait that should be invited to the UK to meet with UK companies. Additionally if any UK company has won (or will do so before October) business in the in the Ports Sector in Saudi Arabia and Kuwait and would like to promote their success during this visit please do contact UK Trade & Investment To register your interest in this event please contact Jason Castelino by email jason.castelino@ukti.gsi.gov.uk or telephone 0207 215 8383 www.uktradeinvest.gov.uk Page 10 of 11 Ports ? Kuwait CONTACT LISTS Ministry of Commerce & Industry P O Box 2944 Safat 13030 Kuwait Tel: 00965 2248 0000 Fax: 00965 2246 5103 Web: www.moci.gov.kw Ministry of Public Works P O Box 8 Safat 13001 Kuwait Tel: 00965 2538 5148 Fax: 00965 2539 5532 Web: www.mpw.gov.kw Kuwait Chamber of Commerce & Industry P O Box 775 Safat 13008 Kuwait Tel: 00965 1805 580 Fax: 00965 2243 3858 Web: www.kcci.org.kw Kuwait Ports Authority P O Box 3874 Safat 13039 Kuwait Tel : 00965 2481 2622 Fax : 00965 2481 9714 Web : www.kpa.com.kw www.uktradeinvest.gov.uk Page 11 of 11
Posted: 05 October 2010