Kuwait to spend $25bn on new downstream projects

04 December 2018
Plans include the construction of a new refinery and new gas fractionation plants

State-refiner Kuwait National Petroleum Company (KNPC) plans to spend $25bn on new downstream projects over the next 20 years, as the country joins other regional producers to build out its refining and petrochemicals capacity.

The plans, unveiled on 25 November by state-run Kuna news agency, include the construction of a new refinery and new gas fractionation plants, taking Kuwait's total refining capacity to 2 million barrels a day (b/d) by 2035.

Kuwait is working on two refining megaprojects. Under the $12bn Clean Fuels Project, Kuwait’s two existing refineries, Mina al-Ahmadi and Mina Abdullah, are being combined and modernised. Once complete, Kuwait’s crude refining capacity will be boosted to just over 936,000 b/d, from 736,000 b/d currently.

Kuwait Integrated Petroleum Industries Company (KIPIC) is also building a new 615,000 b/d grassroots refinery at Al-Zour in the south of Kuwait. The $13bn project is due for completion in 2020 or 2021. Like KNPC, KIPIC is another subsidiary of state-owned Kuwait Petroleum Corporation.

Once both megaprojects are complete, Kuwait’s crude distillation capacity will rise to 1.4 million b/d.

KNPC is now carrying out a study for the construction of a new refining complex, according to the company’s CEO Muhammad al-Mutairi. The new refinery will have to be of similar size to the 615,000 b/d Al-Zour complex if Kuwait is to reach its 2 million b/d target.

Kuwait has previously discussed plans for two new 300,000 b/d refineries, one to be built by 2025 and the second by 2035.

Gas processing also features in KNPC’s new plans, with studies under way for two new gas fractionation trains by 2025. These will be Kuwait’s sixth and seventh trains and will take its total gas processing capacity to 3.7 billion cubic feet a day (cf/d).

Kuwait has four fractionation trains at Mina al-Ahmadi with a total processing capacity of about 2.5 billion cf/d. The fifth gas train is being built by Spain’s Tecnicas Reunidas under a $1.45bn contract awarded in 2015. Due for completion late next year, the train will take Kuwait’s capacity to more than 3 billion cf/d.

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