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Refinery news round-up: Upgrades in Middle East remain in focus

Upgrades remain in focus in the Middle East, with more news emerging about upgrade progress at Iran’s refineries. Iran’s central Shazand oil refinery has hit a record among other plants in the country, reaching the target of lowering fuel oil production, state news agency IRNA reported. The country has on its agenda the reduction to below 10% of the low-profit fuel oil production in its refining industry. “Shazand refinery is using a unique technology and processes less than 7% of its feedstock to fuel oil, whereas in other refineries, more than 20% of their feedstock is processed to fuel oil,” the plant’s managing director, Alireza Amin, was quoted as saying.

NEAR-TERM AND FUTURE
NEW AND REVISED ENTRIES

–Iran’s Tabriz oil refinery’s overhaul has ended and operations are back on track, a refinery spokesman said mid-May, downplaying images of thick smoke and fire that led to speculation in local media of an accident. The flames were due to a flaring incident that did not derail the restart of the refinery, said Shaker Khafaei, according to the oil ministry’s Shana news service. “Basic overhaul of Tabriz refinery ended without any accident and problem. The units are being put back in service,” Khafaei was quoted as saying. “Due to safety instructions, we had to urgently shut down one of the units that was restarting in the Tabriz refinery. A large amount of hydrocarbons entered the refinery’s safety flare in a short time. The smoke and flame was because of the transferred gases.” The unit, he said, has been back in service and the situation was fully under control. The gas had accumulated in various units of the refinery due to its turnaround shutdown.

EXISTING ENTRIES

–Saudi Aramco’s biggest refinery in the kingdom, the 550,000 b/d Ras Tanura facility, will carry out a partial shutdown in 2020 to help prepare it for the clean fuels project due to be completed by 2021, a company executive said. The Ras Tanura refinery is expected to be partially shut for between 35 to 40 days. The clean fuels project will produce lower-sulfur diesel and low-benzene content.

–Germany’s Uniper is planning to undertake a debottlenecking program at its ultra low sulfur fuel oil production facility in Fujairah in August, Uniper Energy’s managing director Christopher Wood told delegates at the 11th International Fujairah Bunkering & Fuel Oil forum. “The turnaround that we are expecting in August for the refinery, we’ve found some areas that we can debottleneck and increase capacity, increase flexibility,” Wood said. Uniper has two 40,000 b/d distillation columns in Fujairah which have been designed to process low sulfur crude oils to produce ultra low sulfur fuel oil.

–Satorp has awarded a contract to KBR to debottleneck Train 2 of its 440,000 b/d refinery in Jubail on Saudi Arabia’s Persian Gulf coast, KBR said. The debottlenecking project is expected to increase the original refinery’s throughput by 15% once completed in August 2020. The project will be delivered “to support the upcoming major refinery turnaround in 2020,” KBR said. Upon the completion of the debottlenecking project, the refinery’s capacity will increase to 460,000 b/d.

–Iran’s Imam Khomeini or Shazand, in the Iranian year which started March 21, will carry out works on 10 other units.

–Iran’s Lavan plans works for the Iranian year, which started March 21. The plant will carry out works on downstream units, including HDS, isomerization and hydrotreater, in February 2020.

–Iran’s Tehran refinery, which consists of 20-25 units, carries out some works every year. Its catalyst units undergo basic maintenance every three years whereas the cycle for the non-catalyst units is once every four years.

–Iran’s Isfahan plans maintenance in the Iranian year, which started March 21, from the Iranian month of Farvardin (late March) to Khordad (late May), as well as in the months of Mehr to Aban (late September to late November).

–Iran’s Tabriz has maintenance scheduled for June 2019 involving units in its Zone A, such as the new gasoline production unit and LPG and distillation units. It will take 10-15 days and will impact some of the facility’s product output.

UPGRADES

NEW AND REVISED ENTRIES

–The Kermanshah oil refinery in the west of Iran plans to raise capacity by 15,000 b/d and upgrade its products output, oil ministry news service Shana reported. “With the implementation of this project, Kermanshah oil refining capacity will reach 40,000 barrels/day and quality of its products will be upgraded to Euro 5,” the head of the refinery’s board of directors, Sohrab Barandishan, was quoted as saying. No target date for the start or completion of the work — which has been under consideration for at least four years — was given.

–Iran’s Persian Gulf Star condensate refinery plans to raise its capacity by 140,000 b/d by next March, state television news agency iribnews.ir reported. “By the end of the current [Iranian] year, the capacity of the refinery will reach 540,000 b/d which is considered a record,” refinery managing director Mohammad-Ali Dadvar was quoted as saying. “At the moment, 400,000 b/d of gas condensate from the South Pars gas field is being processed in the Persian Gulf Star,” he said. “With the measures taken so far, this capacity will reach 450,000 b/d by the end of the [Iranian] month of Shahrivar, and when the fourth phase becomes operational, this volume will reach 540,000 b/d,” he said. Shahrivar ends September 22. “In phase 4, we will optimize capacity and remove production bottlenecks. And this job will be carried out by an investment of less than 10% of the costs of building phase 1,” Dadvar said.

–Throughput at Iraq’s Shuaiba refinery, the country’s largest, is set to expand to 280,000 b/d by 2020 after the completion of a delayed fourth unit by September, the refinery’s chief said. Hossam Hussein Wali, director general of the South Refineries Company, said the refinery in Basra is operating at 95% capacity, processing around 200,000 b/d. After rehabilitation of the three operational units in January and February, “operations resumed, and production in March increased up to the planned rate — 200,000 b/d,” Wali said. “Since March 15, the refining units have been 95% active.” The Shuaiba refinery has been Iraq’s largest since 2014, when Islamic State temporarily took over much of northern Iraq and severely damaged the 310,000 b/d Baiji refinery. This outage puts more pressure on South Refineries Company to complete the fourth unit, adding 30% additional capacity to its operations. It was supposed to have been completed last year. “The work is progressing, and we hope it will be completed by September, to start testing and then operation,” Wali said, blaming the delay on issues with contractors. “The increase [to 280,000 b/d] will be reached during the last few months of this year, and at the beginning of next year,” he said. “This will result in an increase of gasoil and naphtha production and benzene imports will go down.”

EXISTING ENTRIES

–The Isfahan refinery in central Iran is currently building a new distillation unit. The project has taken around three years to complete with the commissioning — currently underway — lasting around six months. The unit will not add extra capacity as even though the plant’s nameplate capacity is 200,000 b/d, it has been processing 375,000 b/d for years. The refinery expects to have its upgraded diesel unit operational and, subsequently, reduce its throughput to 360,000 b/d. After its launch, the unit will produce around 16 million liters/day of Euro 4 gasoil. Currently, it produces around 20 million l/d of gasoil, of which only 4 million l/d meet Euro specs. Separately, at Isfahan, a $650 million contract was signed to upgrade mazut and reduce its output.

–KBR has been awarded a contract by Saudi Aramco to provide technology, license, basic engineering design and equipment for its solvent deasphalting technology for the Riyadh refinery residue upgrading and clean fuels project. The solvent deasphalter technology is assisting refiners in complying with the new International Maritime Organization fuel regulations that take place in 2020, KBR said.

–Orpic officially inaugurated the upgrade of its Suhar refinery, aimed to “further maximize the value of Omani crude oil, and meet the increasing demand for oil and refined products locally and internationally,” it said in a statement. The project involves adding five new units, including a Crude Distillation Unit (CDU), Vacuum Distillation Unit (VDU), Delayed Coker Unit (DCU), Hydrocracker Unit (HCU) and Bitumen Blowing Unit. “These units are vital to handle heavy crude more efficiently, which increases the performance, production and lower emissions,” the company said. The five new units are part of the so called Suhar Refinery 2 project, which added 82,000 b/d capacity to the existing 116,000 b/d, taking the total capacity to 198,000 b/d. –US-based Jacobs, a global professional services company, said it has been awarded a contract by Saudi Arabia’s Petro Rabigh 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 into “more profitable projects,” Jacobs said.

–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 whose production amounts to around 1.2 million l/d. Around 2022, the refinery is expected to reduce fuel oil or mazut production from around 25% of the products’ output to below 5%. The refinery, whose nameplate capacity is 115,000 b/d, does not plan any capacity expansion but has focused on unit upgrades.

–ADNOC awarded an $8-million engineering and design contract for a new refinery in Ruwais to Wood Group, the British firm said in a statement, as part of a Dirham 165-billion ($45-billion) downstream expansion by the UAE oil giant. The contract is for a refinery with the capacity to process 600,000 barrels of crude per day, ADNOC said in an emailed statement. The pre-feed phase is expected to be completed by the end of 2019. The new refinery will be designed to allow for integration with existing petrochemicals infrastructure in Ruwais, which is already the world’s fourth-largest single site refinery, ADNOC said. The award to Wood Group is the second stage in a four-stage process before construction can begin. In May 2018, ADNOC announced plans to develop Ruwais into the world’s largest refining and petrochemicals complex, with an aim of increasing refining capacity by more than 65% to 1.5 million b/day by 2025. The expansion includes a plan to build a mixed feed cracker and tripling ADNOC’s production capacity to 14.4 million mt/year from 4.5 million mt/year in 2016.

–Satorp has awarded a contract to KBR to debottleneck Train 2 in Jubail, KBR said. The debottlenecking project is expected to increase the original refinery’s throughput by 15% once completed in August 2020. The project will be delivered “to support the upcoming major refinery turnaround in 2020,” KBR also said. The refinery’s capacity was increased by 10% in 2018, to 440,000 b/d from the 400,000 b/d original capacity, after major maintenance on one of its distillation units. Upon the completion of the debottlenecking project, the refinery’s capacity will be increased to 460,000 b/d. Currently, a major project for a new petrochemical complex at the site is moving to the FEED stage. The $5-billion project, first announced in April 2018, will be next to the Satorp refinery in Jubail and is due to start up in 2024. The project will maximize the synergy between the refinery and the petrochemical complex.

–Phase 2 of the rehabilitation of Iraq’s largest refinery, Baiji, has begun. The 310,000 b/d capacity refinery is targeting production of 140,000 b/d with the startup of the Salahaddin 1 CDU along with the restart of gasoline and hydrogen units by the end of March, the oil ministry said. The refinery restarted commercial operations at its 70,000 b/d Salahaddin 2 CDU in September 2018, more than four years after being damaged during fighting against the Islamic State group. The refinery had been offline since mid-2014 following its takeover by IS and recapture by federal forces in the summer of 2015.

–Iran’s Abadan, with 400,000 b/d nameplate capacity, aims to stabilize its throughput at 360,000 b/d. It is building a 210,000 b/d distillation unit as part of its upgrade project, which started in 2012 and is scheduled to be finished in 2021. It is expecting — following the upgrades that consist of four stages — to reduce its fuel oil output by 40%. Currently, it is also working on increasing its gasoline production from 12 million l/d to 20 million l/d. The project has a 45-month timetable and construction has been going on for 22 months. The main equipment will arrive at the site by March.

–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.

–Kuwait’s slow-moving Clean Fuels refinery project faces further delays and will not be completed until later this year, at least six months more than originally planned, a key official told S&P Global Platts. “We are putting our efforts alongside the contractors to finish the project before the end of this year — 2019,” Abdullah al-Ajmi, deputy CEO of projects at state-owned Kuwait National Petroleum Co., said. Work on the estimated $16-billion Clean Fuels project has been going on since 2014. It will see the 270,000 b/d Mina al-Ahmadi and 466,000 b/d Mina Abdullah refineries integrated into a single complex, with new units added that will increase total capacity to 800,000 b/d and improve the quality of output. KNPC expects to commission one unit per month until the end of 2019.

–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 the US engineering firm KBR for the design of a new residue hydro-processing unit as part of its expansion of the Zarqa refinery in Jordan.

–Bahrain Petroleum Co. has awarded a $4.2-billion contract for the expansion and modernization of the Sitra refinery, slated for completion in 2022, taking total capacity to 360,000 b/d.

–US engineering company CB&I has been awarded a $95-million contract for the expansion and modernization of the 305,000 b/d Saudi Aramco Shell Refinery, or Sasref, in Jubail.

LAUNCHES

NEW AND REVISED ENTRIES

–UAE-based Brooge Petroleum and Gas Investment Co. said it will build a new oil refinery at the port of Fujairah focused on producing bunker fuel that will be compliant with IMO sulfur regulations. The refinery will have a planned capacity of 250,000 b/d, with the first phase operational by the first quarter of 2020, BPGIC CEO Nicolaas Paardenkooper said, according to UAE state news agency WAM.

EXISTING ENTRIES

–Kuwait’s newest refinery, Al-Zour, was 80% complete, local media reported in March 2019, citing a statement by Kuwait Integrated Petroleum Industries Co., a subsidiary of Kuwait Petroleum Corp. The site includes a refinery, LNG processing facilities and a petrochemical complex. The new 615,000 b/d Al-Zour refinery is set for completion in 2020. The petrochemical complex is due for completion in 2023 with startup expected in 2024. The LNG capacity is 66.5% complete.

–Saudi Aramco said its greenfield Jazan refinery near the border with Yemen is expected to begin processing crude oil in the second half of this year, about a year after its original commissioning date. In a statement to S&P Global Platts, Aramco said the complex’s utilities systems are now operational. “Crude oil processing is expected to start during the second half of 2019,” the company said. “The complex design capacity is 400,000 b/d with full conversion configuration, integrated with [a] power generation complex.” The refinery, part of a new city on Saudi Arabia’s southern Red Sea coast, had originally been scheduled for startup in the second half of 2018, but analysts have speculated that security concerns following a suspected Houthi missile launch towards Jazan last April may have caused the delay. Saudi air defense forces intercepted and destroyed the missile, and Aramco subsequently said all of its plants and facilities in Jazan were operating as normal. In its statement to Platts, Aramco did not provide any reasons for the new refinery’s delay in starting up.

–The Duqm refinery project in Oman was expected to start up in 2022, a senior official from the Port Duqm Company SAOC said. The refinery was expected to process medium and light crudes from Kuwait and Oman, according to Erwin Mortelmans, commercial director of Port Duqm Company SAOC. It will focus on producing refined products such as diesel, jet fuel, naphtha and refrigerated LPG, he said. Construction of the plant, located in the special economic zone in Duqm, began in June 2018.

–Kuwait may add a new refinery in the south of the country, which could add 130,000 b/d to 160,000 b/d refining 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. Though the contract would be between Pacific Future Energy and the oil ministry, it would be supervised by state-owned South Refineries Company.

–Iraq opened a downstream tender, hoping to attract engineering and construction companies to build a new refinery in Basra province.

–Iraq signed a contract with two Chinese companies for the country’s first new refinery to be built with foreign investors. The contract, with PowerChina and Norinco, covers construction and operation of a new 300,000 b/d export-oriented refinery, along with an integrated petrochemicals complex near Iraq’s existing oil export facilities on the southern Al-Fao peninsula, which leads to the Persian Gulf. The oil ministry is still 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. For the latter, it signed a contract with Rania International in February 2018. 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 and another in Qayarah, a territory previously occupied by the IS. It did not say if it will be a completely new construction or a building out of the existing Qayarah refinery, which has a 20,000 b/d nameplate capacity but has been operating at 4,000 b/d.

–Construction of the 140,000 b/d Karbala refinery, Iraq’s first new downstream facility in decades, has been stalled due to lack of finance. Work is also yet to start on the 150,000 b/d Missan refinery.

–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.
Source: Platts

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