Kuwait’s Oil Ministry hopes to shrug off its reputation for delays to major projects, after unveiling spending of more than $100bn on the oil sector in the next five years to boost production capacity by 20 per cent.
State-owned Kuwait Petroleum Corporation (KPC) launched a huge spending plan earlier this year — more than 70 per cent earmarked for the upstream oil sector — to help Kuwait hit its 4 million barrel-a-day (b/d) target for crude oil production capacity by 2020, up from about 3.2 million b/d currently.
Some 3.65 million b/d of this additional capacity will come from Kuwait Oil Company, with the remainder from Kuwait’s portion of the partitioned Neutral Zone that it shares with Saudi Arabia.
These plans have long been held by Kuwait, and many analysts doubt whether the Gulf state will meet this deadline, given that it has been pushed back repeatedly.
Alongside this upstream expansion, KPC’s 2040 strategy sets out plans for Kuwait to build out its downstream sector, with a planned capacity of 2 million b/d by 2035, up from 936,000 b/d currently.
Work is already well under way on the massive clean fuels project to modernise and expand Kuwait’s three existing refineries by next year.
KPC has also started work on the long-delayed 615,000 b/d Al-Zour refinery, which will boost its refined product exports and provide fuel oil for power generation. When complete in 2020, it will take capacity to 1.4 million b/d.
Alongside Al-Zour, Kuwait plans to build a new integrated petrochemicals facility, known as the olefins-3 project, which will entirely use liquid feedstock from the refinery.
Another as yet unspecified refinery is also in the works for 2035, as well as 1 million b/d of joint-venture refining capacity to be built outside of Kuwait.
The Gulf state already has significant overseas refining assets, operated by Kuwait Petroleum International, a KPC subsidiary. These include the 268,000 b/d Milazzo refinery in Sicily, a joint venture with Eni, and Vietnam’s new 200,000 b/d Nghi Son refinery, which commenced operations in April 2018.
Kuwait is also working with neighbouring Oman to build another 230,000 b/d refinery at Duqm in a rare example of intra-Gulf cooperation.
This article is extracted from a report produced by MEED and Mashreq titled The Future of Middle East Energy. Click here to download the report