'The new refinery is a strategic project. It will be designed to produce low-sulphur fuel oil to be used as feedstock by the MEW [Ministry of Electricity & Water] for power generation,' Sami Fahed al-Rushaid, KNPC acting chairman and assistant managing director (planning & projects), told MEED in an interview on 21 September.

At present MEW, with installed capacity of just over 8,000 MW, utilises about 250,000 barrels a day (b/d) of crude oil. MEW's demand for fuel oil is expected to be 550,000 b/d by 2006/07, as an additional 2,000-MW power plant is planned to be built at Al-Zour south on a fast-track basis. At a later stage, MEW also plans the construction of a 2,400-MW power and desalination plant at Al-Zour north.

To meet the growing demand for feedstock, Kuwait Petroleum Corporation (KPC) in January 2002 signed a broad agreement with Qatar Petroleumand the US' ExxonMobil Corporation to import 1,000 million cubic feet a day (cf/d) from the North field through a subsea pipeline. In January this year, KPC also signed another agreement with National Iranian Gas Companyfor the import of at least 300 million cf/d of gas. Progress has been delayed on both projects.

'Power consumption is increasing. We need to have the flexibility to set up the new refinery to avoid delays or any interruption in feedstock supplies,' he said. 'We are in the process of seeking approval from KPC to set up the new refinery. We will then move immediately into the implementation phase.'

US-based Foster Wheeler has carried out a pre-feasibility study for the proposed fourth refinery. 'The next phase will be a detailed engineering study, determining the capacity and working out an estimate on the project cost,' Al-Rushaid said. 'We have two options [for the capacity] depending on the varying energy demand.' KNPC is considering either a 300,000-b/d or a 460,000-b/d refinery. The proposed scheme is likely to be located near Shuaiba and will cost about KD 250 million-360 million ($830 million-1,200 million). It will take about three years to complete.

Along with the construction of a new refinery, KNPC is also focusing on a project to upgrade its three refineries. 'It is not to increase capacity, but is aimed to upgrade the existing units to meet future product specifications in line with global environmental legislations,' Al-Rushaid said.

Foster Wheeler is due to complete by the end of the year a detailed study for the proposed scheme. The study will include identification of bottlenecks, suggest ways to reduce sulphur contents and increase storage capacity and survey the hydraulic systems (MEED 2:8:02; 5:4:02).

At present, KNPC produces a total of 930,000 b/d from its three refineries at Mina al-Ahmadi, Mina Abdullah and Shuaiba.