KUWAIT - The Logistics.

Kuwait has the capacity to export up to 2.4m b/d of crude oil and petroleum products out of its terminals. Before Iraq's August 1990 invasion, Kuwaiti terminals had the capacity to load more than 3m b/d of crude oil and almost 800,000 b/d of refined products. This will be possible again by end-2005, when a big expansion at Mina Ahmadi terminal will be completed (see details in DT 22).

KPC has adequate logistics in Kuwait and overseas. In Kuwait KOC operates all crude oil and gas pipelines. Oil products pipelines are operated by its downstream unit KNPC (see background in Vol. 56, No. 23).

Kuwait has four oil terminals located near its refineries. The largest are Mina Ahmadi and Mina Abdullah, the latter also being upgraded. The others are at Shuaiba in Kuwait itself and at Mina Saud in the Divided Zone.

Oil Shipping: KPC's Kuwait Oil Tanker Co. (KOTC) has one of the largest fleets in OPEC to carry crudes, oil products and LPG. It has 44 oil tankers with a total capacity of more than 4m dwt, including five double-hull product carriers received in late 1999 and through 2000. KOTC is to be privatised, together with Petrochemical Industries Co. (see DT 23).

When US and British forces were preparing for war against Saddam's Baathist regime of Iraq in early March 2003, 27 of KOTC's tankers were deployed to shuttle crude oil and petroleum products down to safer ports in the southern Gulf or Arabian Sea for transfer to foreign tankers. Iraq then had at least 50 Silkworm anti-ship missiles, but their threat was downplayed by western naval commanders.

US forces had kept the Fao peninsula, the only location where the Silkworms were in range of Kuwait, under intense surveillance and had hit missile batteries there twice since September 2002.

KOTC's Director Yousef Al Qabandi said in early March the biggest risk to commercial shipping then was sabotage, such as the suicide bomb attack on the French tanker Limburg off Yemen last year. A major problem was to be if insurance rates "went crazy". If that happened, he said, KOTC was even going to stop paying insurance premia.

The US Navy's 5th Fleet in Bahrain had advised shipping operators to continue on a "business as usual" basis until further notice. However, it had warned of the need of "ongoing vigilance" against terrorist attacks.

But the US-led war in Iraq lasted only three weeks and Saddam's regime in Baghdad fell on April 9.

The US and British navies had been beefing up their merchant shipping liaison staff since early 2003. The British had deployed several liaison teams around the Middle East to enhance communications with the British merchant shipping community. The US also had offered to provide naval protection.