5 March 2014
Hyundai Engineering & Construction has halted work on a $3bn Puerto la Cruz refinery project in Venezuela owing to non-payment of interim costs.
The project, which was awarded by PetrÃ³leos de Venezuela (PDVSA) two years ago, is expected to be delayed by a year or so, and the Korean firm is reportedly concerned over the prospects for the project.Â
An industry source told the Business Korea website that "the facility expansion and improvement project in Puerto la Cruz has been almost halted due to non-payment since late last year. And PDVSA recently gave notice of a year of construction delay."
Hyundai E&C won the project in June 2012 to renovate the facilities of the oil refining plant located 250km east of Caracas. It is the first project of Hyundai E&C in the Venezuelan construction market. The company obtained the order jointly with Wison Engineering of China and Hyundai Engineering.
It all started so well: Hyundai Engineering chief executive Jung Soo-hyun (second from right) signing the contract to construct the Puerto la Cruz refinery (Hyundai)
There was brighter news for the Korean engineer in Iraq last month. Its joint venture with fellow Korean contractors SK Engineering & Construction and GS Engineering & Construction was chosen to build a $6bn oil refinery near the town of Karbala in the south of the country.
The refinery is to play a key role in the development of the Iraqi economy, and the inauguration of the work was marked by a ceremony at which Prime Minister Nouri al-Maliki gave a speech.
The refinery is designed to process 140,000 barrels of oil a day, and is the first step in Iraq’s plan to increase refining capacity to 750,000bpd. When complete in 2018 it will produce a range oil and gas based products, including asphalt.
Iraq is planning three other large refineries, including the Nasiriyah Integrated Project, a 300,000bpd refinery, the auction for which takes place on 19 June.