KUWAIT - The Refineries.

Under a four-year management contract signed in January 1994, Stone & Webster of the US has evaluated the cost of each its projects, drawn up a list of prequalified companies, prepared tender documents and supervised the work.

KPC now is considering construction of a fourth grassroots oil refinery in Kuwait with a capacity of between 200,000-300,000 b/d, among new projects proposed. Foster Wheeler of the US has done a pre-feasibility study on it. Proposed to be built in the south at the cost of KD 248.5m ($800m), this would produce high and low sulphur fuel oil for power generation.

The Ministry of Electricity and Water (MEW) estimates that local demand for fuel oil for power generation will rise to 550,000 b/d by 2004. At present the MEW receives from KNPC more than 60,000 b/d of fuel oil for power generation.

Mina Al Ahmadi, the biggest refinery in Kuwait with a capacity of more than 450,000 b/d, was heavily damaged by an explosion on June 25, 2000. The blast, caused by a gas leak at the plant's LPG pipeline which shook the ground 15km away, killed five workers and injured 50 others. The plant was shut down completely as two of its crude distillation units with a combined capacity of 240,000 b/d were destroyed. This was the second Kuwaiti accident in less than a month, as a gas leak at the Shuaiba refinery caused two fatalities in June 2000.

In early Dec. 2000 Swiss loss adjusters and re-insurers Robertson accepted a $340m plan, submitted by the plant's contractors Fluor Daniel of the US and Sunkyong of South Korea, to repair the refinery and rebuild and upgrade some of its units. This followed an agreement reached in late October between KNPC and Kuwait Insurance Co. over KNPC's claim arising from the explosion. The plan was to complete the work within about 32 months. The contract includes installation of two new naphtha continuous catalytic reformers (CCRs), each with a capacity of 18,000 b/d, at the cost of about $200m, and UOP is their licence provider. Foster Wheeler is the project manager.

In October 2000 KNPC had a 200,000 b/d crude distillation unit (CDU) No. 4 back on stream. In April 2001, an 85,000 b/d CDU started up at the plant. This raised its production capacity to 285,000 b/d. Then KNPC said the refinery will return to full production capacity by August 2002.

Mina Al Ahmadi, which could process over 460,000 b/d of crude oil, was the least seriously damaged of the refineries in the Gulf crisis and war. It was the first to be brought back into operation. Two of its CDUs, the fluid catalytic cracker (FCC), the vacuum re-run unit and the control room were all badly damaged. The catalytic reformer, the only one in Kuwait, was virtually destroyed. Initial repairs were completed in early August 1991, when one of the plant's CDUs began processing about 110,000 b/d. Capacity was raised progressively to 185,000 b/d. In early 1994 a second CDU came back on stream, boosting capacity to 295,000 b/d. The plant went back into full capacity in late June 1994. The management and supervision of reconstruction and upgrading was done by Foster Wheeler.

KNPC appointed Rendel Palmer & Tritton of the UK as its consultant to assess the viability of marine facilities and recommend measures to rehabilitate and improve them. All units rehabilitated, repaired or rebuilt turned out to be better than they were before Iraq's invasion, as in the case of the units at Mina Abdullah and Shuaiba.

Central control was installed by the French firm Cegelec, under a KD25.8m contract signed in July 1993. Cegelec's work included the gas processing plant and installation of an operating system. Technipetrol of Italy in October 1998 won a $13.1m contract to revamp and upgrade instrumentation and control systems to allow introduction of new technology and software.

Projects at Mina Al Ahmadi before the June 2000 explosion included a $125m gasoil desulphurisation (GOD) plant to produce 70,000 b/d of 0.01 sulphur gasoil/diesel, as well as sulphur and aromatics. It was to use technology provided by Haldor Topsoe under a contract signed in November 1998, with Parsons being the project consultant. LG Engineering of South Korea, which got the EPC contract for this in February 2000, began work on the GOD plant in May, and was committed to complete the project within 22 months from the date of award.

Projects for Mina Al Ahmadi, tendered in mid-1994 and awarded since then, have included the following:

- Revamping the MTBE, alkylation and FCC units in one project called MAFP, which had been planned before Iraq's invasion. The work entailed refurbishing the existing units and construction of a new 1,300 b/d MTBE plant, a 4,500 b/d alkylation unit as well as spent acid regeneration and LPG pre-treatment units. The FCC expansion from 30,000 to 40,000 b/d was to provide feedstock for a polypropylene plant built for the PIC-Union Carbide petrochemical JV (Equate) which went on stream in 1997. The MAFP contract was awarded in late January 1995 to Mitsui Engineering & Shipbuilding Co. The project was completed in late 1997.

- Installation of an acid gas removal plant to sweeten associated gas and condensate feedstocks supplied to the refinery by KOC. The work involved building new processing units with a capacity to handle 210 MCF/day of gas and 44,000 b/d of condensates. Feedstocks were to come from the gas gathering centres No. 27 and No. 28 in Minagish and Umm Gudair. A $135m contract for this project was awarded to Sunkyong in September 1996.

Current projects include installing a long-proposed tank farm at Mina Al Ahmadi to provide additional storage capacity of 8.5m barrels at the cost of about KD 270-285m. This entails construction of 17 new tanks, each with a capacity of 500,000 barrels. The EPC contract is to be tendered in Sept.

A $100m project to upgrade export facilities at Mina Al Ahmadi will involve renovating the north and south piers and building a replacement for the south pier (built in the 1940s) by 2002. Frederic R. Harris of the Netherlands was appointed as consultant for project in early 1997. Mouchel & Partners of the UK was the front-end engineering and design consultant. Hyundai got the KD 100m ($324m) EPC contract for this on Sept. 27, 2000. Repair work is to keep the south pier operational until 2002 and the north pier operational for up to 15 years. The new facility to replace the south pier will be almost 2 km long with up to six births. It will handle a variety of products including gasoil/diesel, naphtha, kerosine, butane and propane. It will serve tankers of 60,000 to 300,000 dwt.

Mina Abdullah refinery reached its pre-August 1990 capacity of 230,000 b/d in January 1993. Its capacity has since risen to reach 255,000 b/d. After being damaged during the Gulf crisis and war, it was partially back on stream by end-1991, operating at the rate of 100,000 b/d.

It was the control room that suffered the greatest damage. In December 1992 KNPC gave a contract to the local firm Mohammed Abdulmohsin Kharafi for reconstruction of the central control unit. The work was completed in 1994. In October 1991, KNPC had awarded a two-year, KD3m contract for the maintenance of instruments and control systems to the local firm Instruments Installation & Maintenance Co. (Imco), which was the incumbent contractor for instrumentation at Mina Abdullah at the time of the Iraqi invasion. Imco was given another contract in January 1993 for further electrical and instrumentation work at the plant. In February 1993 Noyes Engineering of Australia won a $15m contract for mechanical repair work, including at the coke handling unit.

The refinery's offshore loading facilities were rehabilitated by the third quarter of 1992, when repairs were done to jetty No. 1, which handles tankers of up to 150,000 dwt. The smaller No. 2 jetty was operating again by March 1992. In May 1993, a new SPM was installed at the terminal.

In November 1993 KNPC invited international contractors to prequalify for refurbishment of the steam system in order to increase steam supply capacity at a cost of $20m. The work was to involve installation of new boilers, associated facilities and the revamping of the control system. Mitsui Engineering & Construction Co. made the lowest bid in November 1994 for the EPC contract, which was to cover installation of the boilers and associated facilities. The project was to be completed before end-1997. But the project was re-tendered and work was delayed.

The Mina Abdullah refinery had been modernised, partly rebuilt and expanded by early 1989 at the cost of $2.2 bn. The project was inaugurated officially on Feb. 20, 1989. It was the last of three major refinery modernisation and upgrading projects under an eight-year programme in which KNPC had invested more than $5 bn. Work under that programme included the Shuaiba and Mina Al Ahmadi refineries. But the one for Mina Abdullah was by far the most expensive.

In July 2000, a minor fire at Mina Abdullah refinery caused slight damage. The refinery was then running flat out to meet demand because of blasts at the Mina Al Ahmadi and Shuaiba refineries in June.