Page 4 - DMEA Week 22 2021

DMEA COMMENTARY DMEA

Kuwait makes

downstream progress as

restructuring continues

Kuwait has completed the first of two $15bn+ projects to increase refining capacity,

while the top state oil firm is continuing with plans to restructure the sector.

MIDDLE EAST KUWAIT this week announced the completion Al-Zour
of works on a $15.7bn project to overhaul and Meanwhile, fellow KPC subsidiary Kuwait
expand its two key refineries, while the country’s Integrated Petroleum Industries Co. (KIPIC)
WHAT: leading NOC moves forward with restructuring is nearing completion on the project it was set
KNPC’s Clean Fuels the crowded oil sector. up to manage, the new Al-Zour refinery that is
Project comprises the With decision-making often encumbered expected to come on stream in November. Add-
upgrade and expansion by complex bureaucracy, Kuwait Petroleum ing a further 615,000 bpd to Kuwait’s refining
of Mina Abdullah and the Corp. (KPC) plans to streamline its oil and gas capacity, the project is estimated to cost around
Mina al-Ahmadi refinery subsidiaries from eight to three under a bespoke $16.1bn, including the cost of associated petro-
to a combined capacity of restructuring strategy provided by US-based chemical and LNG facilities.
800,000 bpd. Strategy&. Movement on the development has sped up
of late and London-listed Technip Energies was
WHY: Clean Fuels last week awarded a six-year contract for engi-
The completion of the Downstream-focused Kuwait National Petro- neering and management services across the
CFP marks a major leum Corp. (KNPC) this week announced that Al-Zour complex.
milestone in Kuwait’s it had completed a new hydrocracking unit at The project was reported to have reached
efforts to increase its the Mina Abdullah refinery, signalling the end of 97.83% completion in February.
refining capabilities. work on the $15.7bn Clean Fuels Project (CFP). KIPIC had set a target commissioning date
Completion of the works comes a month of late 2020, pushing this back to Q1 2021 as
WHAT NEXT: ahead of schedule, though the broader CFP itself restrictions relating to coronavirus (COVID-19)
The country’s has suffered numerous delays. slowed progress.
overcrowded state No date has yet been given for the commis- Several service firms and contractors
oil sector is set to be sioning of the CFP, but KNPC said that work involved in the development of Al-Zour were
slimmed down to just had been finalised on hydrocracking unit 114, reported to have attempted to invoke force
three companies in line a 70,000 barrel per day facility that will produce majeure, with restrictions having made it impos-
with a restructuring low-sulphur diesel and kerosene to meet Euro- sible to meet deadlines, while Kuwait recently
prepared by US-based pean standards. The unit is located within the re-introduced measures to halt the spread of
Strategy&. wider 454,000-bpd Mina Abdullah refinery. COVID-19 and restricted travel into the country
The CFP comprises the upgrade and expan- in early February.
sion of Mina Abdullah and the Mina al-Ahmadi Test runs are understood to be ongoing,
refinery to a combined capacity of 800,000 bpd. while oil feedstock began flowing to the refinery
A 264,000 bpd crude distillation unit (CDU) through a dedicated pipeline on December 1.
was brought on stream at Mina Abdullah in Minister of Oil and Minister of Higher Edu-
December, while Petrofac announced in early cation Dr Muhammad Al-Fares said in April that
May that it had finished work on the 50,000 bpd the first mini refining unit would begin opera-
hydrocracking unit 214 at Mina Abdullah. tions in November, as Al-Zour gradually ramps
According to KNPC, the CFP is “a major pil- up ahead of full commissioning at the end of Q1
lar in KNPC and KPC’s strategy that aims at rais- 2022. The two projects form a significant part of
ing the refining capacity of Kuwait to 1.4mn bpd KNPC’s $25bn, two-phase project to more than
in the medium [term] in addition to fulfilling the double its refining capacity to 2mn bpd by 2035.
highest possible rate of energy processing at local
refineries to meet the local and international Tanker addition
demand of high quality petroleum products.” As refining capacity ramps up, Kuwait is

P4 www. NEWSBASE .com Week 22 03•June•2021