KUWAIT CITY (AFP), Jun. 3, 2009

Construction firms from Japan and South Korea have asked Kuwait for compensation for scrapping letters of intent for a 15-billion dollar oil refinery, a Kuwaiti oil executive said on Wednesday.

"We have received claims for compensation from some of the companies," Faruq al-Zanki, head of national refiner Kuwait National Petroleum Co., told reporters.

"The claims have been referred to the legal department and we are currently studying them," Zanki said without disclosing the names of the companies or the sums demanded.

In May last year, Kuwait awarded four contracts worth $8.3 billion to four South Korean companies and a Japanese firm to build the refinery. Later, the oil-rich emirate signed letters of intent with the firms.

But the Kuwaiti government in March put the 615,000 barrel a day refinery project on hold following opposition from lawmakers and canceled the letters of intent.

A contract worth $4 billion to build the refinery's main units was awarded to a consortium of Japan's JGC Corp. (1963.TO) and Korea's GS Engineering and Construction (006360.SE).

Hyundai Engineering and Construction (000720.SE) secured a $1.12 billion order for offshore facilities, while Daelim Industrial (000210.SE) and SK Engineering and Construction received contracts worth $1.184 billion and $2.06 billion respectively.

Zanki said KNPC is awaiting a decision by the Supreme Petroleum Council, the highest oil body headed by the prime minister, on whether the refinery project will be re-tendered or entirely scrapped.

In December Kuwait scrapped a $7.5 billion partnership with U.S. Dow Chemical (DOW) after pressure from lawmakers, citing its high cost amid the global economic downturn.  

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