Oil product stockpiles at the UAE’s Port of Fujairah have dropped to a six-week low as air conditioning demand in the sweltering Middle East reduced supplies of fuel oils for power generation.
Total inventories stood at 21.176 million barrels as of July 5, down 8.2% from a week earlier and the lowest since May 24, data from the Fujairah Oil Industry Zone, or FOIZ, at the port on the UAE’s east coast showed July 7. Temperatures are rising throughout the Middle East, leading to increased demand of fuels for power generation to run cranked-up air conditioners.
Meanwhile, gasoil supply in the Middle East is unlikely to increase over the coming months as demand uncertainties linger over further lockdowns in Asia and Europe, trading sources close to refineries said this week. One trading source said that gasoil demand in the Middle East remains “sideways”, supported mainly by buyers such as South Africa, Kenya and Tanzania. Refineries are not raising production due to weak margins and demand uncertainty in the coming months, another source said.
New and ongoing maintenance
New and revised entries
** The RFCC unit at UAE’s is back online after experiencing technical issues, market sources said June 30. Traders reported about technical issues at the beginning of June. The company declined to comment.
Existing entries
** Iran’s Tehran refinery has started on June 9 maintenance on the 125,000 b/d crude distillation unit, the official oil ministry news agency Shana reported. The turnaround will involve the 125,000 b/d CDU 1, VDU, LPG and Merox units. Earlier in June the refinery briefly halted production following an explosion and fire at two gasoil tanks.
** KNPC has postponed planned major works at its Mina al-Ahmadi refinery to 2022. The works, involving CDUs, had been originally planned for 2021. 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.
** Bahrain’s Sitra was expected to start partial works. The works would involve a staggered shutdown of various units, including an FCC. The gasoline platformer unit at the refinery has been offline for economic reasons over the past few months.
** Syria’s Homs is undergoing staggered maintenance, which will next involve the delayed coker unit 11 and a coal unit.
Upgrades
New and revised entries
** Iran’s Imam Khomeini also known as Arak oil refinery signed in July 2021 a Eur290 million technological deal with the Research Institute of Petroleum in a bid to produce 90,000 mt of needle coke on an annual basis, upon launching a coker unit. The move will helps Iran with supply of the sanctioned material of needle petroleum coke. Sulfur content of the calcined needle coke will be up to 0.55%. “With preparation of tender documents and selection of the project’s contractor by the first half of the next [Iranian] year (September 2022), it is predicted that the needle coke production at Imam Khomeini refinery becomes operational in March-May 2025,” Gholamhossein Ramezanpour, managing director of the plant said. In addition to producing needle coke, the project will “cut down” the fuel oil production at the refinery from below 10% currently to zero. As a result of the upgrade, the refinery will produce Euro 4 and 5 gasoline and diesel.
In 2019, the National Iranian Oil Products Refining and Distribution Company and the state-owned Iranian Mines and Mining Industries Development and Renovation or IMIDRO signed an agreement for production of sponge and needle coke in Bandar Abbas and Arak refineries. Both refineries are building coke units.
** An approval by the Iraqi Council of Ministers is sought for a 17,000 b/d reformer and 31,000 b/d naphtha hydrotreater at the Basrah refinery, which will be part of the plan’s current upgrade. The two units will be built by a consortium including the State Company For Oil Projects (SCOP) and the Czech company UNIS, with duration expected at 43 months. A 70,000 b/d CDU unit at Basrah is near mechanical completion. Once online, the unit will raise the refinery’s capacity to 280,000 b/d. Preparations have also commenced to start work on the FCC unit by the Japanese Contractor JGC. The project consists of a fluid catalytic cracking unit (34,500 b/d), vacuum distillation unit (55,000 b/d) and a diesel desulfurization unit (40,000 b/d). The project is 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.
** Iran’s Abadan refinery has reported in July 2021 progress on its upgrade. “The Abadan oil refinery stabilization and expansion is like a new refinery that stands beside the old Abadan refinery… and the old refinery will be renovated,” Mohammad Rezaie, the National Iranian Oil Products Refining and Distribution director for research and technology, was quoted by the oil ministry-run news service Shana. The new plant includes all the processing units. The modernization of Abadan will provide high-quality, Euro-standardized diesel. According to Mehdi Arami, manager of the expansion and stabilization project, “one of other objectives of this project given its 360,000 b/d capacity is that the production of fuel oil will “lower from 40% to 25%.” Meanwhile, production of regular gasoline and kerosene will increase 16% and 25%, respectively. The Phase 2 upgrade 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.
Existing entries
** Kuwait’s Kuwait National Petroleum Co. (KNPC) has completed all units that are part of the Clean Fuels Project upgrade at its Mina Abdullah refinery. The No 114 hydrocracking unit was the last of the 70 units under the upgrade project to be completed, “paving the way for full operation of the project,” according to a media report. The Clean Fuels Project, ongoing since 2014, seeks to combine and upgrade the Mina Abdullah and Mina al-Ahmadi refineries into a single 800,000 b/d complex. Work at the Mina al-Ahmadi refinery was completed in 2020.
** Ecomar Energy Solutions has agreed to expand its refinery and build new storage capacity at Fujairah. Refinery capacity will be increased to 62,000 b/d from 22,000 b/d currently, and inland storage capacity will be increased more than fivefold to 1 million cu m in the phase 3 expansion, which should be completed by the end of 2024. Ecomar’s refinery will add an additional crude distillation unit, bringing it to 2 CDUs.
** Iran’s Isfahan refinery aims to reduce fuel oil output to zero upno completing upgrade. Currently fuel oil accounts for 18% of the refinery’s output. A desulfurization project has been designed in the plant to re-refine 81,000 b/d from distillation towers remaining to make lighter products. This project is due to go on stream by March 2025.
** The project to upgrade the quality of heavy products at Iran’s Bandar Abbas was 40% complete. Several units have been foreseen in this project including solvent de-asphalting, 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%.
** 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.
** 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 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. 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.
** There is a program in Syria’s Ministry of Oil for the Homs Refinery to reach the highest possible production capacity.
** Bahrain Petroleum Co., or BAPCO, is aiming to phase out all fuel oil production by 2025 and focus on diesel and jet fuel. A $6 billion upgrade and modernization project of BAPCO’s flagship Sitra refinery is now 60% complete. The program will also see the refinery’s capacity expand to 380,000 b/d from 267,000 b/d. 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.
** Iraq’s oil minister 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 plans to rehabilitate and develop the Baiji complex north of Baghdad, where three refineries were damaged during the war with the Islamic State group. Currently one refinery is operating at 70,000 b/d, a second 70,000 b/d unit and a third 140,000 b/d facility should become operational. 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 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.
** 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.
** Abu Dhabi National Oil Co. reported in August 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.
** 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 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. Work on the clean fuels project at Ras Tanura started in 2018.
** 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.
** US engineering company CB&I has been awarded a $95 million contract for the expansion and modernization of Sasref.
** 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.
Launches
New and revised entries
** The Iraqi oil minister has awarded a consortium to build a new 100,000 b/d refinery in the Dhi Qar province. The original project envisaged a 300,000 b/d plant, but this was later reduced to 150,000 b/d and subsequently to 100,000 b/d. The refinery is expected to be built with integrated production units such as a fluid catalytic cracking unit and a catalytic reforming unit, and will be able to produce refined oil products that meet Euro 5 grade specifications, as per the statement.
Existing entries
** Engineering and technology company Technip Energies has been awarded a “significant contract” for project engineering and management by Kuwait Integrated Petroleum Industries Company (KIPIC) for various potential projects at the Al-Zour complex, including the refinery, petrochemical complex, LNG import facilities. The contract is for the duration of six years. KIPIC is responsible for operating and managing the grassroot complex. The new Al-Zour refinery in Kuwait started test runs in late 2020. It is expected to put more units in operation around Q4 and start producing a full range of products by the end of the year. The petrochemicals complex at Al-Zour was due for completion in 2023, with start-up expected in 2024.
** Iraq expects to gradually commission the greenfield Karbala refinery in Q1 2022. The refinery will include 35 units and 44 storage tanks. 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 plans to invite international companies to compete to build a 300,000 b/d refinery in the south of the country. 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. A petrochemical facility could be integrated into the refinery at a later stage.
** Iraq aims to build a new refinery in Basrah 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.
** 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.
** 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.
** The Duqm refinery project in the south of Oman is now more than 80% complete. The refinery has been under construction since 2018, and is expected to start up in 2022.
** Canada Business Holdings’ 300,000 b/d ultra low sulfur fuel oil refinery project at Duqm, Oman, will process residue from OQ and Kuwait Petroleum International’s 230,000 b/d Duqm refinery project, CBH CEO Moses Solemon said. “The CBH refinery complements the Oman-Kuwait refinery. Therefore, we are in synergy and not in competition,” Solemon told S&P Global Platts. The company is targeting the end of 2023 for the refinery to process its first batch of products. The plant will use technology that reduces sulfur emissions.
** Saudi Arabia’s Jazan refinery is ramping up but is facing regular missile attacks launched from just across the border with Yemen. The 400,000 b/d refinery, also known by the alternate spelling Jizan, lies in the far southwest of Saudi Arabia on the Red Sea, about 60 km from the Yemeni border. Aramco has yet to formally announce its commissioning. 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. It was expected to start primary distillation units around February-March 2021 and proceed with secondary units later.
** UAE-based Brooge Energy expects its 25,000 b/d refinery planned in the UAE’s Fujairah to be developed, constructed, installed and operating by Q1 2022.
** 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.
** Iran is aiming to start construction of the Anahita oil refinery in the western province of Kermanshah designed to process 150,000 b/d of crude oil.
** Kuwait may add a new refinery in the south of the country, which could add 130,000-160,000 b/d of capacity.
Source: Platts