Printer Friendly

KUWAIT - Refining Sector.

Kuwait's three refineries now can process more than 900,000 b/d of crude oil and yield high quality products for export. Their nameplate capacity is 900,000 b/d, compared to less than 800,000 b/d before the Iraqi invasion of Kuwait in August 1990. The actual capacity would reach about one million b/d in the coming year.

The refining sector has been fully rebuilt after the liberation war of early 1991 and Kuwait has regained its position as the second biggest refining centre in the Arab World next to Saudi Arabia. The priority is to ensure that the refineries have the flexibility to respond to growing world demand for high quality products, with exports from the refineries now averaging almost 700,000 b/d.

Kuwait National Petroleum Co. (KNPC), the local refiner and a subsidiary of Kuwait Petroleum Corp. (KPC), is implementing projects to upgrade the plants and improve their export facilities (profiles on following pages).

Limited privatisation of the downstream sector will not affect the refineries as state-owned entities. KNPC has sold 30 out of its 80 petrol stations as well as storage and distribution systems for oil products and LPG to Kuwait Company for Marketing Petroleum Products. This is a domestic marketing company formed in 1998. Shares in the new company are owned by the private sector, KPC, and KNPC. Local demand for oil products now is averaging about 175,000 b/d (see DT No. 21).

The overseas refining capacity of KPC will be raised to 700,000 b/d - 300,000 b/d in Europe and 400,000 b/d in Asia - to boost its trans-national position (see overseas expansions in DT No. 24).

Emphasis On High Value Products: KNPC's goal is to increase value and meet world demand for higher quality distillates, particularly in Asia which is the main market for Middle East export refiners. This involves converting heavy fuel oil to more valuable distillates such as very low sulphur gasoil/diesel, naphtha, and kerosine.

Kuwait's traditional markets east of Suez have lowered acceptable levels of sulphur content. In 1995 India, the largest market for Middle East gasoil/diesel, reduced its sulphur content requirement from 0.5% to 0.25% and a further reduction is expected shortly. Japan limits the sulphur content of gasoil/diesel consumed in its market to 0.05%, the limit imposed in the European Union in recent years. The other Asian countries are gradually imposing such standards.

Upgrading projects include modernisation of gasoline and gasoil/diesel units at the Mina Al Ahmadi, Mina Abdullah and Shuaiba refineries. One focus is to produce 0.01% sulphur grades. Fluor Daniel of the US did a study in 1995 on ways to increase gasoline output at Shuaiba and Mina Al Ahmadi. The study focused on revamping the naphtha reforming unit to raise the octane rating of gasoline and reduce its benzene and aromatic content.

Middle East gasoil and diesel account for over half of Asia's total mid- distillates imports, with Kuwait and Saudi Arabia being the main exporters.

KNPC wants to maintain its leading position in exports.

One project is a Kuwait-Japan joint venture to manufacture catalysts, called Kuwait Catalyst Manufacturing Co. (KCMC), with a capital of KD7m ($23m). A $50m, 5,000 t/y plant will produce catalysts used to clean up sulphur and other unwanted particles from oil as it is broken down in the refining process. Most of the catalysts will be used by the Kuwaiti refineries, and the rest would be exported to other GCC states. The Indian subcontinent is a potential market as well.

The partners (23%) include Japan International Development Organisation (JAIDO), Itochu Corp., and Japan Energy Corp. (JOMO). The International Investor (TII), a Kuwaiti Islamic finance house, holds 34%. Other Kuwaiti investors hold the rest. Capital for the project was raised in mid-November 1996 and the board of directors was appointed by end-November. JOMO was to provide the technology licence for the plant.
COPYRIGHT 1999 Input Solutions
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:APS Review Downstream Trends
Geographic Code:7KUWA
Date:May 31, 1999
Previous Article:KUWAIT - Free Zone.
Next Article:KUWAIT - The Refineries.

Related Articles
YEMEN - Little Aden Refinery
Strategies For ME Oil Producers - Oil As The Balancing Energy Source.
Present Position of MENA Companies with Conclusions.
KUWAIT - Profile - First Deputy Premier & FM Shaikh Sabah Al Ahmad Al Jabir Al Sabah.
KUWAIT - The Refining Sector.
KUWAIT - The Oil Refining Sector.
KUWAIT - The US Market.
ABU DHABI - The Abu Dhabi Oil Refining Sector.
KUWAIT - The Kuwaiti Oil Refining Sector.
KUWAIT - Upgrades.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters