Refinery News Roundup: Middle East autumn works continue

Seasonal refinery maintenance has been continuing in the Middle East, while news emerges on launches. Separately, Bahrain Petroleum’s Bapco refinery was back to normal operations after running at reduced rates last month, traders said. It curbed throughput mid-September because of reduced feedstock from Saudi Arabia after attacks on the kingdom’s oil facilities. Bahrain’s oil ministry said September 25 the refinery had cut production due to maintenance, adding that pipelines between Bahrain and Saudi Arabia were functioning again and production would soon be back to normal levels. According to some market sources, the refinery was still running at reduced rate, although that was not impacting the market.

NEAR TERM AND FUTURE

–The FCC unit at Kuwait’s Mina al-Ahmadi was expected to come back from maintenance “in the last 10 days of October”, according to a company official. The 40,000 b/d unit was shut September 3, with works set to last 4-5 weeks.

–Qatar Petroleum plans to conduct maintenance at the No.1 condensate splitter at its Laffan Refinery 2 complex throughout November, market sources said.

EXISTING ENTRIES

–Saudi SASREF refinery will undergo works in October, market sources said. Saudi Arabian Oil Co. said it has completed the acquisition of Royal Dutch Shell’s 50% stake in the SASREF refinery in Jubail Industrial City for $631 million. The acquisition supports Saudi Aramco’s plan to increase the complexity and capacity of its refineries, as part of its long-term downstream growth strategy,” Saudi Aramco and Shell said in a joint statement.

–Dubai’s Emirates National Oil Co. is carrying out works on a CDU unit and reformer at the Jebel Ali condensates refinery. The works might continue into the fourth quarter, sources said. ENOC is undertaking a $1 billion expansion to boost capacity by 50% to 210,000 b/d and meet Euro V emissions standards. It signed a contract with France’s Technip in September 2016 for the engineering, procurement and construction of a new 70,000 b/d condensate processing train, boosting capacity from 140,000 b/d.

–Germany’s Uniper said it has “identified even more improvements than previously expected” for its Fujairah facility, which will be implemented in phases over 2019-20. The first of the phases started in August and was “expected to contribute to our production gains and operating flexibility objectives for IMO 2020”. It had previously said it planned to undertake a debottlenecking program at its ultra low sulfur fuel oil production facility in Fujairah in August. Uniper has two 40,000 b/d distillation columns in Fujairah that have been designed to process low sulfur crude oils to produce ULSFO.

–Saudi Aramco’s biggest refinery in Saudi Arabia, the 550,000 b/d Ras Tanura facility, will carry out a partial shutdown in 2020 to help prepare for a clean fuels project due to be completed by 2021, a company executive said. The refinery was expected to be partially shut for 35-40 days. The clean fuels project will produce lower sulfur diesel with low benzene content.

–Satorp has awarded a contract to KBR to debottleneck Train 2 of its 440,000 b/d refinery in Jubail on Saudi Arabia’s Persian Gulf coast, KBR said. The debottlenecking project was expected to increase the refinery’s throughput by 15% once completed in August 2020. The project will be delivered “to support the upcoming major refinery turnaround in 2020”, KBR said. After the debottlenecking project, the refinery’s capacity will increase to 460,000 b/d.

–Iran’s Imam Khomeini or Shazand refinery will carry out works on 10 units this Iranian year, which started March 21.

–Iran’s Lavan refinery will carry out works on downstream units, including HDS, isomerization and hydrotreater, in February 2020.

–Iran’s Tehran refinery, which consists of 20-25 units, carries out some works every year. Its catalyst units undergo basic maintenance every three years whereas the cycle for the non-catalyst units is once every four years.

–Iran’s Isfahan planned maintenance from late September to late November.

UPGRADES

EXISTING ENTRIES

–KNPC launched a new diesel production unit U-216 at its Mina Abdullah refinery. The unit can produce around 73,000 b/d of 10 ppm diesel. The launch is part of the Clean Fuels refinery project. Work on the estimated $16 billion project has been going on since 2014. It will see the 466,000 b/d Mina al-Ahmadi and 270,000 b/d Mina Abdullah refineries integrated into a single complex, with new units added that will increase total capacity to 800,000 b/d and improve the quality of output.

–Iraq has agreed a $1 billion soft loan with Japan to fund a landmark fluid catalytic cracking complex at the Basra refinery, the country’s largest. The Japan International Cooperation Agency announced the loan after its signing on Sunday with Iraq’s finance minister in Baghdad. “The new plant is expected to process 55,000 barrels per stream day of residue crude (RC) from the crude distillation unit in the existing Basra refinery,” JICA said. The complex is targeting a 2024 completion date. Separately, throughput at Shuaiba is set to rise to 280,000 b/d by 2020 after the completion of a delayed fourth unit by September, the refinery’s chief said. Hossam Hussein Wali, director general of the South Refineries Company, said the refinery in Basra was operating at 95% capacity, processing around 200,000 b/d. The Shuaiba refinery has been Iraq’s largest since 2014, when Islamic State temporarily took over much of northern Iraq and severely damaged the 310,000 b/d Baiji refinery.

–The Isfahan refinery in central Iran is building a new distillation unit. The project has taken around three years with the commissioning — currently under way — lasting around six months. Once the diesel unit becomes operational, the refinery will reduce its throughput to 360,000 b/d. The refinery has been running at 375,000 b/d for years, well above its nameplate capacity of 200,000 b/d. Separately, an Iranian private contractor signed a Eur600 million ($670 million) contract with the Isfahan refinery to build a fuel oil processing unit, the oil ministry news service reported.

–The Kermanshah oil refinery in the west of Iran plans to raise capacity by 15,000 b/d and upgrade its products output, oil ministry news service Shana reported. “With the implementation of this project, Kermanshah oil refining capacity will reach 40,000 b/d and quality of its products will be upgraded to Euro 5,” the head of the refinery’s board of directors, Sohrab Barandishan, was quoted as saying. No target date for the start or completion of the work — which has been under consideration for at least four years — was given.

–Iran’s Persian Gulf Star condensate refinery plans to raise its capacity by 140,000 b/d, state television news agency iribnews reported. “By the end of the current [Iranian] year, the capacity of the refinery will reach 540,000 b/d which is considered a record,” refinery managing director Mohammad-Ali Dadvar was quoted as saying. “At the moment, 400,000 b/d of gas condensate from the South Pars gas field is being processed in the Persian Gulf Star,” he said. “With the measures taken so far, this capacity will reach 450,000 b/d by the end of the [Iranian] month of Shahrivar, and when the fourth phase becomes operational, this volume will reach 540,000 b/d,” he said. Shahrivar ends September 22. “In phase 4, we will optimize capacity and remove production bottlenecks. And this job will be carried out by an investment of less than 10% of the costs of building phase 1,” Dadvar said.

–Saudi Aramco has awarded a contract to KBR to provide technology, license, basic engineering design and equipment for its solvent deasphalting for the Riyadh refinery residue upgrading and clean fuels project. The solvent deasphalter technology assists refiners in complying with new International Maritime Organization fuel regulations in 2020, KBR said.

–US-based Jacobs, a global professional services company, said it has been awarded a contract by Saudi Arabia’s Petro Rabigh to provide front-end engineering and design work, as well as project management consultancy, for a fuel oil upgrade project dubbed “Bottom of the Barrel”. The project aims to convert residue from crude distillation into more profitable projects, Jacobs said.

–Following a major upgrade project, Iran’s Tabriz refinery expects to reduce its fuel oil production. The refinery currently produces 4 million l/d (1.416 million mt/year) of fuel oil, which is primarily used as a feedstock for tar, production of which amounts to around 1.2 million l/d. Around 2022, the refinery is expected to reduce fuel oil, or mazut, production from around 25% of product output to below 5%. The refinery, whose nameplate capacity is 115,000 b/d, does not plan any capacity expansion but has focused on unit upgrades.

–ADNOC awarded an engineering and design contract for a new refinery in Ruwais to Wood Group, the UK firm said in a statement, as part of a Dirham 165 billion ($45 billion) downstream expansion by the UAE oil giant. The contract is for a 600,000 b/d refinery, ADNOC said in a statement. The pre-feed phase is expected to be completed by the end of 2019. The new refinery will be designed to allow for integration with existing petrochemicals infrastructure in Ruwais, the world’s fourth-largest single-site refinery, ADNOC said. The award to Wood Group is the second stage in a four-stage process before construction can begin. ADNOC announced plans in May 2018 to develop Ruwais into the world’s largest refining and petrochemicals complex, with an aim of increasing refining capacity by more than 65% to 1.5 million b/d by 2025. The expansion includes a plan to build a mixed feed cracker and tripling ADNOC’s production capacity t 14.4 million mt/year from 4.5 million mt/year in 2016.

–Satorp has awarded a contract to KBR to debottleneck Train 2 in Jubail, KBR said. The debottlenecking project is expected to increase the original refinery’s throughput by 15% once completed in August 2020. The project will be delivered “to support the upcoming major refinery turnaround in 2020”, KBR said. The refinery’s capacity was increased by 10% in 2018, to 440,000 b/d, after major maintenance on one of its distillation units. Upon the completion of the debottlenecking project, the refinery’s capacity will be increased to 460,000 b/d. A major project for a new petrochemical complex at the site is moving to the FEED stage. The $5 billion project, first announced in April 2018, will be next to the Satorp refinery in Jubail and is due to start up in 2024. The project will maximize the synergy between the refinery and the petrochemical complex.

–Iran’s Abadan, with 400,000 b/d nameplate capacity, aims to stabilize its throughput at 360,000 b/d. It is building a 210,000 b/d distillation unit as part of its upgrade project, which started in 2012 and is scheduled to be finished in 2021. It expects — following the upgrades that consist of four stages — to reduce its fuel oil output by 40%. It is also working on increasing its gasoline production to 20 million l/d from 12 million l/d. The project has a 45-month timetable and construction has been going on for 22 months. The main equipment will arrive at the site by March.

–A gas condensate project is under construction in Iran as part of eight planned 60,000 b/d condensate refineries around Siraf, Bushehr province. The National Development Fund is financing one of the plants.

–Iraq has added another 10,000 b/d of refining capacity after completing the rehabilitation of a CDU at the Kasik refinery in the north of the country, the oil ministry said. Rehabilitation work continues at the refinery’s other 10,000 b/d CDU.

–Jordan Petroleum Refinery Co. has awarded a contract to US engineer KBR for the design of a new residue hydro-processing unit as part of its expansion of the Zarqa refinery in Jordan.

–Bahrain Petroleum Co. has awarded a $4.2 billion contract for the expansion and modernization of the Sitra refinery, slated for completion in 2022, taking total capacity to 360,000 b/d.

–US engineer CB&I has been awarded a $95 million contract for the expansion and modernization of the 305,000 b/d Saudi Aramco Shell Refinery, or Sasref, in Jubail.

LAUNCHES

NEW AND REVISED ENTRIES

–UAE-based Brooge Petroleum & Gas Investment Co. is on track to start up the first 24,000 b/d phase of its greenfield refinery in Fujairah by the end of the first quarter of 2020, its CEO said. The project is part of a larger 250,000 b/d refinery complex the company plans to build in the fast-growing storage hub of Fujairah, CEO Nico Paardenkooper said. The first phase is aimed at producing fuel oil compliant with the International Maritime Organization’s new sulfur regulations on marine fuel that come into effect in 2020, Paardenkooper said. “Everybody is looking for IMO compliant fuel oil and not many people can produce it at the moment,” Paardenkooper said. BPGIC’s refinery will be the third in Fujairah, where Vitol and Uniper have processing facilities. The first phase of the refinery, will use a variety of crudes, which the CEO declined to specify. It will use a “very simple process” to produce the IMO-compliant fuel, Paardenkooper said. The full 250,000 b/d refinery complex, once completed, will produce fuels “from all ends of the barrel”, Paardenkooper said. “We are still in talks with parties to construct that part.” The refinery is a joint venture between BPGIC and Sahara Energy Resources. BPGIC is handling the building and operation the facility, while Sahara will handle the crude sourcing, product trading and offtake agreements.

EXISTING ENTRIES

–Kuwait Integrated Petroleum Industries Company has awarded Honeywell a contract to expand the Al-Zour refinery, Honeywell UOP said. “The newly designed complex will increase the plant’s output capacity of fuels and petrochemicals,” it said. Honeywell UOP will revise the configuration and capacity of the gasoline production facilities and will also supply licenses and design services and key equipment “to produce clean-burning fuels, paraxylene, propylene and other petrochemicals.” The gasoline section will include a 98,000 b/d RFCC complex, a UOP Selectfining unit for the production of low sulfur gasoline components as well as two UOP Merox for treating propane for propylene production and isobutane for clean-fuels blending components. The CCR platformer and naphtha hydrotreater have been expanded “to meet the needs of the larger gasoline and aromatics complexes.” The petrochemical section will include an aromatics complex with capacity to produce 1.4 million mt/year paraxylene. “When completed, this will be the largest integrated refinery and petrochemicals plant ever constructed in Kuwait,” said Jim Moshi, general manager for Middle East, Honeywell UOP. The 615,000 b/d refinery is targeted for completion by 2020. Local media reported in March the refinery was 80% complete. The petrochemicals complex at Al-Zour is due for completion in 2023, with start-up expected in 2024.

–Angola’s state-owned oil company, Sonangol, is working with Iraq’s ministry of oil to build a complex refinery in Mosul, an area which has recently been liberated from Islamic State militants, a company official said. “We have expressed interest in building a complex refinery to process heavy crude,” Sonangol’s head of Iraq operations, Richard Wadsworth, said. “We are working seriously with the ministry on this.” The ministry of oil put out a tender for a refinery in Gyarah last year. The discussions between Sonangol and the ministry are for a refinery with a capacity of 100,000-150,000 b/d of complex products, Wadsworth said. Sonangol operates the Qayara oil field in Mosul, which produces around 30,000 b/d.

–Saudi Arabia’s Jazan refinery is more than 99% complete and will begin commissioning in a few months, according Saudi Aramco’s corporate presentation at the Asia Oil & Gas Conference in Kuala Lumpur. The Jazan refinery, which is expected to reach full capacity of 400,000 b/d by 2021, will be used to first meet domestic refined product requirements and then export to other markets. At full capacity Jazan will produce 209,900 b/d of ULSD, which will account for 19% of Saudi Aramco’s gross ULSD output of 1.09 million b/d from all its refineries including joint venture refineries. The volume will be able to meet 44% of the country’s ULSD demand of 473,300 b/d, according to the presentation. It will produce 71,400 b/d of 91 RON and 95 RON gasoline, which will account for 12% of Aramco’s gross gasoline output of 602,700 b/d and be able to meet 14% of the Saudi Arabia’s gasoline demand. Jazan will also produce 25,000 b/d of HSFO and 1,000 b/d of LPG for the neighboring integrated gasification combined-cycle power plant. It will also produce 5,700 b/d of LPG and 23,500 b/d of HSFO for the domestic market. The HSFO output will equal roughly 5% of its overall production and 4% of domestic demand.

–The Duqm refinery project in Oman was expected to start up in 2022, a senior official from the Port Duqm Company SAOC said. The refinery was expected to process medium and light crudes from Kuwait and Oman, according to Erwin Mortelmans, commercial director of Port Duqm Company SAOC. It will focus on producing refined products such as diesel, jet fuel, naphtha and refrigerated LPG, he said. Construction of the plant, located in the special economic zone in Duqm, began in June 2018.

–Kuwait may add a new refinery in the south of the country, which could add 130,000-160,000 b/d of capacity.

–Canada’s Pacific Future Energy has been awarded a contract to build a 150,000 b/d refinery outside the southern Iraqi town of Nassiriya. Though the contract would be between Pacific Future Energy and the oil ministry, it would be supervised by state-owned South Refineries Company.

–Iraq opened a downstream tender, hoping to attract engineering and construction companies to build a new refinery in Basra province.

–Iraq signed a contract with two Chinese companies for the country’s first new refinery to be built with foreign investors. The contract, with PowerChina and Norinco, covers construction and operation of a new 300,000 b/d export-oriented refinery, along with an integrated petrochemicals complex near Iraq’s existing oil export facilities on the southern Al-Fao peninsula, which leads to the Persian Gulf. The oil ministry is still seeking investors for a 100,000 b/d refinery in Wasit province, a 70,000 b/d refinery in Samawa province, and a 70,000 b/d refinery in Kirkuk. For the latter, it signed a contract with Rania International in February 2018. It has also added a 70,000 b/d site at Diwaniya, in Qadisiya province, south of Baghdad, a new 150,000 b/d project to be built in the west Anbar province and another in Qayarah, a territory previously occupied by the IS. It did not say if it will be a completely new construction or a building out of the existing Qayarah refinery, which has a 20,000 b/d nameplate capacity but has been operating at 4,000 b/d.

–Construction of the 140,000 b/d Karbala refinery, Iraq’s first new downstream facility in decades, has been stalled due to lack of finance. Work has yet to start on the 150,000 b/d Missan refinery.

–Houston-based GTC Technology has agreed to a deal to provide a gasoline production unit to Iraq’s Al-Barham Group, which plans to build a refining complex in the northern city of Kirkuk.
Source: Platts