Page 9 - DMEA Week 09 2023

DMEA REFINING DMEA

Kuwait’s Al-Zour ramping up production

KUWAIT KUWAIT’S Al-Zour refinery is ramping up start-up is achieved.
towards its 615,000 barrel per day (bpd) capac- Although most diesel supplies are to be
ity this year, potentially plugging a supply gap in directed towards Europe, exports to other coun-
Europe while meeting further demand in Africa tries in the Americas and Oceania are increasing
and Asia. too.
Kuwait will be reducing crude exports and Europe lacks around 745,000 bpd of Russian
increasing product shipments as it brings the diesel after introducing its sanctions, according
refinery up to full capacity with the start-up of to estimates, as RBC Capital’s Mike Tran noted.
two new crude distillation units (CDUs) later “Diesel inventories have been tight for much
this year, following the launch of its first one last of the past 18 months, but a slew of refining
year. capacity additions pushing 2mn bpd is expected
The project’s developer, state-owned Kuwait this year in regions ranging from Mexico to the
Integrated Petroleum Industries Co. (KIPIC), Arab Gulf to North Africa means more refined
first began test runs at the giant greenfield facility product supply,” he added.
in June 2022, marking the start of the commis-
sioning. This included the start-up of one of the Shortages in the East
refinery’s three 205,000-bpd (CDUs) with the Furthermore, Al-Zour will be able to export
intention of commissioning them fully later that between 85,000 bpd and 106,000 bpd of very
year. The second and third CDUs were to have low sulphur fuel oil (VLSFO) once it reaches full
been commissioned in October and December; capacity. This will meet 8% to 10% of monthly
however, delays pushed this back until later in fuel oil demand in Asia, which is short of fin-
2023 instead. ished 0.5% VLSFO products.
Speaking during the Qatar Economic Forum Refinitiv analyst Emril Jamil said: “We
in 2022, Sheikh Nawaf Al-Sabah, CEO at KIPIC’s anticipate most of Kuwait’s VLSFO will flow to
parent firm Kuwait Petroleum Corp. (KPC), said Singapore, as it is a key maritime hub for fuel
that his company had already been receiving replenishments.”
interest from European buyers regarding refined Asia is also short naphtha, with data from
products ahead of Al-Zour’s launch. As the ban Vortexa and Kpler showing that KPC had
on Russian product imports came into view, he exported 150,000 tonnes of light and full-range
said that there was a “tremendously good market naphtha to countries such as South Korea and
for fuel oil, and whether it’s bunker or diesel”. Japan between November and January from
Al-Zour.
European demand Shipments to other destinations such as Tai-
Al-Zour will provide multiple products, includ- wan, Singapore and Thailand have also been ris-
ing diesel and jet fuel, naphtha and fuel oil. The ing, and total exports could increase to 3.5mn
diesel the refinery aims to provide will meet tonnes per year (tpy) at full capacity.
European specifications, as the continent is set KPC aims to provide 176,000 tonnes of naph-
to be its biggest buyer. Diesel exports could reach tha in February from Al Zour, and total monthly
up to 143,000 bpd, while jet A-1 has the poten- exports are set to hit 407,000 tonnes following
tial to achieve 97,000 bpd once the refinery’s full this, according to data provided by Kpler.™

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