Kuwait has approved the reallocation of a 2.5 million square metre (sqm) petrochemical plot in Al-Zour to Kuwait Gulf Oil Company (KGOC), local Arabic-language newspaper Alanba reported on September 17, 2026, as cited by the Zawya Projects section. The move is intended to support construction of an onshore gas processing facility that will handle gas and condensate output from the Dorra gas field, and as a result the previously planned Al-Zour “Third Olefins and Second Aromatics (D2)” petrochemical project on the same site has been cancelled, according to reports. The new onshore facility is valued at approximately $3.3 billion and is designed to process up to 632 million cubic feet per day (MMcf/d) of gas and approximately 88,900 barrels per day (b/d) of condensate.
The reassigned plot is located near the Al-Zour refinery complex operated by Kuwait Integrated Petroleum Industries Company (KIPIC), a subsidiary of Kuwait Petroleum Corporation (KPC). A separate 700,000 sqm plot had previously been allocated nearby for the onshore gas processing facility itself, and the newly reassigned 2.5 million sqm plot is reported to support the expansion of that facility. The Dorra gas field is located in the Gulf waters of the Saudi-Kuwait Neutral Zone and is being developed by Khafji Joint Operations (KJO), a joint venture between KGOC and Aramco Gulf Operations Company (AGOC), a subsidiary of Saudi Aramco. The new onshore facility is designed to receive gas via pipeline from Dorra’s offshore facilities, with surplus gas reportedly to be supplied to Kuwait Oil Company (KOC), KPC’s upstream unit, for oilfield injection. Front-End Engineering Design (FEED) work has been carried out by Technip Energies, while the acid gas removal unit technology is reported to be supplied by Honeywell UOP (US) and the sulfur recovery unit technology by Shell Catalysts & Technologies (UK), a Shell subsidiary. KGOC is reported to be preparing to issue an Engineering, Procurement and Construction (EPC) tender for the facility.
The reassigned Al-Zour plot covers 2.5 million sqm, and the new onshore gas processing facility is valued at approximately $3.3 billion. Its processing capacity is reported at up to 632 MMcf/d of gas and approximately 88,900 b/d of condensate. The project cancelled to free up the site is the Al-Zour “Third Olefins and Second Aromatics (D2)” petrochemical project. The Dorra field is estimated to hold approximately 20 trillion cubic feet of gas and approximately 310 million barrels of oil, and the overall Dorra field development program, including offshore development and the onshore processing facility, is reported to be valued at up to $10 billion.
The move reflects a shift in Kuwait’s investment priority toward expanding gas and condensate processing infrastructure for the Dorra field ahead of a previously planned new petrochemical complex, according to reports. Al-Zour hosts several large-scale refining, petrochemical, and gas processing projects, and the plot reassignment is seen as a reallocation of limited site resources toward supporting gas field development.
This case illustrates how a previously planned petrochemical expansion project can be reprioritized in favor of more urgent gas field development and energy supply objectives in the Middle East. In recent years, several countries in the region have placed growing emphasis on boosting domestic gas self-sufficiency and expanding gas processing infrastructure for both domestic use and export, and this decision is consistent with that broader trend. Acid gas removal and sulfur recovery technologies for onshore gas processing facilities are supplied by a small number of global licensors, including Honeywell UOP and Shell Catalysts & Technologies, meaning contractors partnered with these technology providers may be relatively well positioned as the EPC tender for this facility proceeds. The cancellation of a major petrochemical project in favor of converting its site to oil and gas infrastructure can also be read as a signal that some project owners are shifting investment priority from downstream chemical expansion toward securing upstream and midstream gas processing capacity. This trend suggests that gas processing and gas field development contracts could account for a relatively larger share of upcoming Middle East EPC awards compared with refining and petrochemical projects.
First, attention is on when KGOC will formally issue the EPC tender for the onshore gas processing facility and which contractor consortia will participate. Second, progress on KJO’s four EPC packages covering the offshore portion of the Dorra field — platform installation, surface production facilities, gas compression facilities, and the onshore processing plant — warrants continued monitoring. Third, it remains unclear whether the cancelled Third Olefins and Second Aromatics (D2) project will be relocated to another site or shelved entirely, and further announcements from the Kuwaiti government are awaited. Fourth, because the Neutral Zone resources are jointly administered by Kuwait and Saudi Arabia, the pace of bilateral coordination between the two governments remains a variable that could affect the project schedule.