London — Middle East oil product sales could reach 8 million-9 million b/d by 2023 as new refineries open up in the UAE, Saudi Arabia, Iraq and Oman, Glander International Bunkering senior sourcer Sean Burgin said.
“This additional volume could boost business in Fujairah, complementing bunker demand plus storage and trade activities,” Burgin told the Petrospot Middle East Bunkering Convention held online Jan. 26. Refining capacity in the Middle East is continuing to grow at pace, with a number of new, export-oriented plants and capacity upgrades due to come onstream in the coming years. S&P Global Platts Analytics expects total refining capacity in the Middle East to rise to average 12 million b/d in 2023, up from 9.9 million b/d in 2019.
Distillation capacity is set to rise this year on the commissioning of the Jazan and Al-Zour refineries.
Saudi Arabia’s Jazan refinery is expected to reach full production only by mid-2022 due to weak global demand for refined products, Facts Global Energy, or FGE, said in a note. “We assume that trial runs at Jizan could start yielding first test cargoes of on-spec products by early Q2. But it will still take up to June for commercial runs to start with the refinery then running at 200,000 b/d by late 2021 and reaching fully production capacity of 400,000 b/d by mid-2022,” FGE said in the note.
In other news, Syria’s Homs refinery has not been affected by a fire at fuel trucks offloading crude late Jan. 19, according to local media reports.
The refinery was not impacted by this incident, and will continue operations, Minister Bassam Toumeh told state TV Jan. 19. He said about nine fuel trucks caught fire when crude oil was being offloaded, but the fire was contained. There are minor material losses and no human casualties. He did not indicate the cause of the fire. The trucks are used for shipping crude to the Homs refinery after the oil pipeline network has been attacked previously, according to the the Sana news agency.
Abu Dhabi National Oil Co is exploring the potential of new fuels such as hydrogen and hopes to become a major supplier in future, said Sultan Ahmed al-Jaber, UAE minister of industry and advanced technology, who is also ADNOC group CEO. “The company is exploring the viability of markets in Asia and Europe, and will build the business case as those markets develop, to position the UAE as a major supplier of Blue Hydrogen,” Jaber said in a statement published in the week started Jan. 24 on the ADNOC website.
Hydrogen could be “a game-changer” in energy transition and ADNOC already produces about 300,000 mt/year of hydrogen as part of its current industrial processes, according to Jaber.
The state-run oil company has formed an alliance with Mubadala Investment Co. and ADQ to produce green hydrogen — hydrogen produced from renewable energy — and will independently develop blue hydrogen, which is produced from natural gas in a process that captures CO2 emissions.
NEW AND ONGOING MAINTENANCE:
RefineryCapacity b/dCountryOwnerUnitDurationHoms107,100SyriaHomsPartOngoingBanias120,000SyriaBaniasPartBackSitra267,000BahrainBapcoPartFebMina al-Ahmadi466,000KuwaitKNPCFull2022
New and ongoing maintenance
New and revised entries
** Syria’s Banias refinery has started supplying oil products after resuming operations following the arrival of crude oil cargoes, according to the Ministry of Petroleum and Mineral Resources. In mid December, there was a fire at a production unit at the refinery. The refinery has general maintenance in September and October, S&P Global Platts reported previously. Separately, the country’s second refinery in Homs has completed maintenance work on the atmospheric distillation unit 21 in mid January. Steam from the unit was tested at the end of last week prior to the unit resuming operations. The refinery completed maintenance of the atmospheric distillation units 10 and 22 in early December. Currently the refinery is undergoing staggered maintenance, which will next involve the delayed coker unit 11 and a coal unit.
** Bahrain Petroleum Co. is planning to conduct scheduled maintenance at the Sitra refinery over February-March for around 30 days, sources with direct knowledge of the matter said. Details of which units would be offline over this period could not be confirmed, but one of the sources described the turnaround as “segregated.” “It [the turnaround] will be done unit by unit, so there will still be production throughout the period,” the source said, adding that the refinery is currently operating at around 80% capacity.
** Kuwait National Petroleum Co., or KNPC, has postponed planned major works at its Mina Al-Ahmadi refinery to 2022, according to a source close to the matter. The works, involving CDUs, has been originally planned for this year. The refinery carried out partial works last year. As part of KNPC’s clean fuels upgrade project, Mina al-Ahmadi is being integrated into a single 800,000 b/d capacity complex along with the Mina Abdullah refinery.
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** Iran’s Isfahan refinery aims to complete an upgrade aimed at reaching Euro 5 specifications for all diesel production in the next Iranian year, which starts March 21. Isfahan managing director, Morteza Ebrahimi, said the plant produces 30 different types of oil products and ranks first in the country in terms of products diversity. He said hexane and pentane have been added to the refinery’s basket recently. The refinery’s gasoil purification unit was expected to go on stream to process 20 million l/d of gasoil into high-quality fuel. “This refinery will have all its products produced matching Euro 4 and Euro 5 standards by 2025,” Ebrahimi said.
** The project to upgrade the quality of heavy products at Bandar Abbas was 40% complete. It started about two-and-half years ago and is due to become operational in September 2021. Iran’s Bandar Abbas and Imam Khomeini refineries plan to build coke plants. The units, which will use fuel oil as feedstock, will take three years to complete and will produce high value products. They will produce around 700,000 mt/year of mostly needle coke. Hashem Namvar, managing director of Bandar Abbas oil refinery, said the refinery has put on its agenda to produce coke in a bid to stop imports of the material used by industrial plants in the country. “For the implementation of upgrading quality of heavy products three years have been considered. Given the coordination and planning made, the executive operations with a $1.5 billion credit will start in the middle of the year 1400,” Namvar said, referring to the Iranian year that starts March 21. He said several units have been foreseen in this project to improve the quality of products including solvent deasphalting, DAO purification, delayed coker, calcined coker, as well as downstream units such as for purification of naphtha and gasoil. Other units will produce and purify propylene, LPG, tar, hydrogen. Fuel oil production in the plant’s basket will be cut below 10% and its sulfur will reach up to 1% of weight percentage, Namvar said.
** Kuwait has commissioned a naphtha treatment unit at its Mina Abdullah refinery as part of its Clean Fuels Project upgrade, the official Kuna news agency reported Dec. 30. The naphtha unit has an output capacity of 23,500 b/d and will clean minerals, sulfur and nitrogen from the fuel, the report stated, quoting KNPC Deputy CEO Wadha al-Khatib. KNPC recently commissioned a new crude distillation unit 111 at its Mina Abdullah refinery, which is “the main gateway” the the Clean Fuels Project. The CDU has 264,000 b/d capacity and will contribute to raising the refinery capacity from 270,000 b/d to 454,000 b/d. Work on the Clean Fuels Project has been ongoing since 2014. It will see the Mina al-Ahmadi and Mina Abdullah refineries integrated into a single complex. Upon completion, Mina al-Ahmadi will have 364,000 b/d capacity and with adding Mina Abdullah, the whole refinery will have 800,000 b/d capacity. In June 2020, the company completed the project at its Mina Al-Ahmadi Refinery.
** Ecomar Energy Solutions has expanded production capacity at Fujairah to 20,000 b/d from 15,000 b/d, and plans to reach 60,000 b/d by the beginning of 2022, when low sulfur fuel oil may be added to the product list. The refinery currently produces naphtha, kerosene, gasoil and residual fuel, and also has floating storage off Fujairah for oil products.
** According to Syrian Prime Minister Hussein Arnous there is a program in the Ministry of Oil for the Homs Refinery to reach the highest possible production capacity. Arnous also said after maintenance, production at the Banias refinery has become “excellent” and there is plan to continue upgrades until “all distillation units return to their normal state.”
** Expansion of Iraqi Shuaiba refinery near Basrah, which was suspended in March due to the pandemic lockdown, has resumed in the first week of November, according to sources close to the matter. The project include expanding the capacity of Shuaiba to 280,000 b/d by installation and construction of a fourth CDU with 70,000 b/d capacity, an LPG unit, water treatment unit and an additional boiler. It was at an advanced stage when the work was suspended. Work is still going on slowly but is expected to be completed and commissioned by March-April 2021.
Separately, Japanese company JGC Holdings Corp. has won a $3.8 billion contract to upgrade the Shuaiba refinery for Iraqi South Refineries Co., a state company under the oil ministry, Platts reported previously. JGC said the project consists of a fluid catalytic cracking unit (34,500 b/d), vacuum distillation unit (55,000 b/d), diesel desulfurization unit (40,000 b/d). The project was scheduled to be completed in 2025. The project aims to convert the excess fuel oil produced by the existing refinery units — 45% of the yield — to lighter products. When completed, the new units will increase production of the Shuaiba refinery by 19,000 b/d of prime grade gasoline (92 RON and 95 RON) and 36,000 b/d of diesel fuel. Both products will meet international environmental standards.
** Bahrain Petroleum Co., or BAPCO, is aiming to phase out all fuel oil production by 2025 and focus on diesel and jet fuel, according to the company’s chairman Dawood Nassif. A $6 billion upgrade and modernization project of BAPCO’s flagship Sitra refinery is now 60% complete, Nassif said. The program will also see the refinery’s capacity expand to 380,000 b/d from 267,000 b/d. BAPCO will announce two further investments in 2021, which will see it target zero fuel oil, and focus on jet fuel and diesel, and also see its current naphtha production upgraded to petrochemicals, Nassif said. “We’re going to make jet fuel for delivery in 2023, which we believe will be smack on the recovery,” Nassif said. In the summer of 2020, BAPCO said the refinery expansion had been delayed due to COVID-19. The project, whose original timescale was four years, had been slated for completion in 2022, but that plan has changed, Platts reported previously.
** Iraq’s Oil Minister Ihsan Ismaeel has laid the foundation stone for two units of total capacity 20,000 b/d at the Haditha refinery site in the western province of Anbar. The units will raise the capacity of the plant to around 35,000 b/d from 16,000 b/d. International companies will be approached to bid for building an additional 35,000 b/d at the refinery, which will raise its overall capacity to 70,000 b/d.
** Iraq is forging ahead with plans to boost its refining capacity by about a third by the first quarter of 2022 to reduce dependence on imports of gasoline and gasoil, deputy oil minister told Platts. The ministry plans to rehabilitate and develop the Baiji complex north of Baghdad, where three refineries were damaged during the war with the Islamic State group, Hamed al-Zobai said. Currently one refinery is operating at 70,000 b/d, a second 70,000 b/d unit will come online by the year-end, and a third 140,000 b/d facility should be operational in the next two years. The third refinery would take total capacity at the Baiji complex back to 280,000 b/d, making it again the largest facility in the country.
** Iraq’s oil ministry Sept. 6 announced plans to upgrade the country’s 20,000 b/d Qayyarah refinery, with the aim of adding a second 70,000 b/d production unit that would take the total capacity of the plant to 90,000 b/d.
** Abu Dhabi National Oil Co reported Aug. 17, 2020, “significant progress” on the crude flexibility project, or CFP, at its Ruwais refinery, with “73% project delivery” of the ongoing upgrade. Upon completion in mid-2022, the CFP will allow ADNOC to process up to 420,000 b/d “of heavier and sourer grades of crude oil” at Ruwais.
** Iran’s Persian Gulf Star’s 420,000 b/d condensate refining capacity will be raised by 60,000 b/d.
** Iran will accelerate the expansion and upgrade of the Shiraz refinery. The expansion, which started in 2017, was due to be completed in three years but was slowed down due to sanctions. The first phase of the expansion and upgrade will involve upgrading the gasoline quality, with the second phase involving a diesel upgrade. An isomerization unit and diesel hydrotreater will be built under the project, estimated at $300 million. Shiraz has around 50,000 b/d current capacity. The expansion will add 26,000 b/d.
** Phase 2 of the upgrade at Iran’s Abadan refinery, which includes modernizing units to produce Euro 4 and Euro 5 compliant products, started in February 2017. Phase 2 includes building atmospheric and vacuum units, as well as gasoline, diesel and kerosene distillation units, a sulfur unit and a catalytic cracking unit. Abadan, with 400,000 b/d nameplate capacity, aims to stabilize its throughput at 360,000 b/d. It ultimately expects, following the four-phase upgrade program, to reduce fuel oil output by 40%.
** 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. By about 2022, the refinery is expected to reduce fuel oil, or mazut, production from around 25% of product output to below 5%.
** The Kermanshah oil refinery in the west of Iran plans to raise capacity by 15,000 b/d and upgrade its products output. “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, said. No target date for the start or completion of the work was given.
** 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.
** ENOC is currently undertaking a $1 billion expansion program to boost the Jebel Ali refinery’s capacity to 210,000 b/d and meet Euro 5 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.
** Saudi Arabia’s Rabigh Refining and Petrochemical Co., or Petro Rabigh, has awarded US-based Jacobs a contract 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. The refinery is in the process of launching the phase 2 expansion, which adds 15 chemical units in the Petro Rabigh complex.
** Saudi Aramco plans to complete a $2.5 billion clean fuels project at its Ras Tanura refinery in the first quarter of 2021. Work on the clean fuels project at Ras Tanura, which started in 2018, is 62% complete. The clean fuels project will produce lower sulfur diesel with low benzene content.
** Saudi Aramco has awarded a contract to KBR to provide technology, license, basic engineering design and equipment for its solvent de-asphalting for the Riyadh refinery residue upgrading and clean fuels project. The solvent de-asphalter technology assists refiners in complying with new International Maritime Organization fuel regulations in 2020, KBR said.
** US engineering company CB&I has been awarded a $95 million contract for the expansion and modernization of Sasref.
** 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 engineering company KBR for the design of a new residue hydro-processing unit as part of its expansion of the Zarqa refinery in Jordan.
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** Saudi Arabia’s Jazan refinery is expected to start primary distillation units around February-March and proceed with secondary units start-up in April-May, according to market sources. In the summer, Saudi Aramco said it expects to begin processing first crude in its new, major Jazan refinery by the first quarter of 2021, more than a year later than initially planned. The newly constructed, 400,000 b/d refinery, also spelled Jizan, will start with crude runs of 200,000 b/d before ramping up to 400,000 b/d, CEO Amin Nasser said. It had previously been expected to be commissioned at the end of 2019 and be ready for full operations in the second half of 2020. Jazan refinery is expected to reach its full production only by mid-2022 due to weak global demand for refined products, Facts Global Energy said in a note.
** Iraq is looking to build a 100,000 b/d refinery in the southern Dhi Qar province with a Chinese-led consortium, the country’s oil ministry said. The Southern Refineries Co. signed a memorandum of understanding with a consortium consisting of Chinese companies Norinco Power China and CNEC along with a UAE-based private company. Hussam Wali, director general at the Southern Refineries Co., said the final contract was expected to be signed after the companies submit an economic model for the plant.
** The new Al-Zour refinery in Kuwait has started test runs, according to a source close to the matter. In September, Fluor Corp. said its joint venture with Daewoo Engineering & Construction and Hyundai Heavy Industries has successfully started up two boilers which began generating steam at the new Al-Zour refinery. Upon completion, the 615,000 b/d refinery is expected to “be one of the largest refineries in the world,” Fluor said.
The refinery has been targeted for completion in 2020, Platts reported previously. The petrochemicals complex at Al-Zour is due for completion in 2023, with start-up expected in 2024. The refinery has six trains of the world’s largest ARDS units (atmospheric residue units), and sulfur recovery units with 99.9% recovery, according to its website.
** Iraq plans to invite international companies to compete to build a 300,000 b/d refinery in the south of the country, the oil minister said Nov. 18. The refinery, to be built in Fao in the Basra Governorate, will be offered under the Build Operate Transfer or Build Own Operate Transfer investment model, Ihsan Ismaael said in a statement. A petrochemical facility could be integrated into the refinery at a later stage, he added.
** Iran’s Khatam al-Anbiya has started construction work on a 120,000 b/d plant to process gas condensate from the offshore South Pars gas field. The construction is scheduled to finish in two years, according to the commander of the Khatam al-Anbiya Construction Headquarters, Saeed Mohammad, speaking on state television. Khatam al-Anbiya’s headquarters is the construction wing of The Revolutionary Guard.
** Iraq is forging ahead with plans to boost its refining capacity. A new 140,000 b/d refinery in Karbala is expected to come online in the first quarter of 2022. Plans are also underway to build a new 70,000 b/d refinery in Qayara, near the Qayara oil field in the north. Besides these projects, the oil ministry is seeking to encourage investors to finance “investment refineries,” in several locations, including Zubair and Fao in the south. Iraq is in talks with Eni to build a 300,000 b/d refinery near the Zubair oil field operated by the Italian company in the southern part of the country. The first phase of the project includes commissioning 150,000 b/d by 2025.
** Iraq opened a downstream tender, hoping to attract engineering and construction companies to build a new refinery in Basra province.
** Iraq’s oil ministry is 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. 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. Work has yet to start on the 150,000 b/d Missan refinery.
** UAE-based Brooge Energy said it had entered a refinery agreement with its Phase I customer to use best efforts to finalize the technical and design feasibility studies for its Fujairah refinery to be located on Phase I and II land and operated by Brooge Energy. The refinery was expected to be operational in Q3 2021 and produce low sulfur fuel oil in compliance with IMO 2020 requirements. Phase I started in January 2018.
** The Duqm refinery project in Oman was expected to start up in 2022. Construction of the plant, located in the special economic zone in Duqm, began in June 2018.
** Construction of the Anahita Oil Refinery in the western province of Kermanshah will start by the private sector in the current Iranian year that started March 20, the provincial governor Houshang Bazvand was quoted as saying by official news agency IRNA. According to Shana, the Anahita refinery has been designed to process 150,000 b/d of crude oil.
** Angola’s state-owned oil company, Sonangol, is working with Iraq’s ministry of oil to build a complex refinery in Mosul. The discussions between Sonangol and the ministry are for a refinery with a capacity of 100,000-150,000 b/d of complex products.
** 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.
** 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.