REFINERY NEWS ROUNDUP: Saudis vacationing at home helps boost gasoline demand

Saudis staying home for vacation because of the COVID-19 pandemic are helping to boost demand for gasoline in Fujairah, where motor fuel exports jumped to a two-year high in July, according to cargo-tracking company Kpler.

Gasoline exports from the UAE's east coast port averaged 192,000 b/d in July, the most since May 2018, Kpler data show. Shipments to Saudi Arabia hit a three-year high in June at 50,000 b/d and were still at 30,000 b/d in July. Pakistan, Iraq and South Africa were also big buyers in July.

Road traffic in Riyadh was above pre-COVID-19 levels for all of July for the first time since the coronavirus hit, although it has since dipped below in the early days of August, according to Apple mobility data.

Saudi Aramco, the world's biggest oil company, is "optimistic" on the market largely recovering to pre-coronavirus levels by the end of the year, Aramco President and CEO Amin H Nasser said in the company's second-quarter results call.

The oil giant saw its profits drop by 73% in Q2 to Riyal 24.62 billion ($6.6 billion), compared with Riyal 92.59 billion ($24.7 billion) for the same quarter of 2019, as it continues to battle the ongoing market crash amid the slump in demand due to the COVID-19 pandemic.

The results reflect the impact of lower crude oil prices, due to the ongoing global market crash, which is mainly caused by a huge drop in demand triggered by the pandemic, the oil giant said in a statement.

Moreover, its revenues for Q2 were 57% down year on year, and 45% lower than in Q1, when the full force of the market slump had not been fully realized. During the quarter, Aramco's hydrocarbons production averaged 12.7 million b/d of oil equivalent. By contrast, production of crude oil and condensate averaged 13.2 million boe/d last year.

On the call, the company threw its announced acquisition of a 20% stake of Reliance Industries' oil-to-chemical business somewhat into doubt.

"The Reliance deal is going through the due diligence and we will make our decision after the due diligence," Nasser said. "We need to take our time and then decide."

The deal, which was first announced in August 2019, was originally set to be concluded before the end of March. Upon completion, it will enable Saudi Arabia to expand its footprint in India's fast-growing refining sector. Progress of the deal has been impacted by the pandemic.

Saudi Aramco expects to begin processing crude in its Jazan refinery by the first quarter of 2021, Nasser said.

Aramco on June 17 said it completed the share acquisition of a 70% stake in Saudi Basic Industries Corp (SABIC) from the Public Investment Fund, Saudi Arabia's sovereign wealth fund, for a total purchase price of Riyal 259.125 billion.

The acquisition of the SABIC stake is part of Aramco's strategy to extend its downstream footprint by growing its integrated refining and petrochemicals capacity to add value across the hydrocarbon chain.

NEW AND ONGOING MAINTENANCE

UPGRADES

LAUNCHES

New and ongoing maintenance

New and revised entries

**A reformer unit at Kuwait National Petroleum Company's Mina al-Ahmadi plant is offline, according to market sources. The shutdown is likely to last until early September, they added. The refinery has issued a buy tender for gasoline to replenish its stocks, sources said. The company wasn't immediately available for comment. 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.

**Gasoline production at the Tehran refinery has risen 20% now work has been completed. "With the implementation of the naphtha reforming catalyst project, in addition to improving the quality of gasoline to Euro 5 norms, the production capacity has hit 8.5 million liters a day too," Managing Director Hamed Aramanfar was quoted as saying by state news agency IRNA. The quality of Tehran's diesel was also higher than other refineries, he said. "Despite all the problems caused by the coronavirus situation, the overhaul was carried out," he was also quoted as saying, adding that bringing a work force together created many risks but "this overhaul was completed and given strict health measures no particular incident took place." Following the completion of the work, "every day, 53,500 barrels, equivalent to 8 million liters, of Euro 4 and 5-based diesel are produced in this refinery and sent to Tehran and (neighboring) Alborz provinces as well as via pipeline to (northeastern city of) Mashad," Aramanfar also said, adding that the total jet fuel produced at the refinery was being sent to the international Imam Khomeini Airport. Armanfar said that there had been problems with the production of catalysts due to sanctions, but "at the moment we have reached full self-sufficiency in catalyst supply." Currently, the refinery has a feedstock capacity of 230,000 b/d, of which around 10,000 barrels are synthetic oil (gas condensates), he said. The maintenance at the refinery started in early July after being delayed by the coronavirus pandemic, IRNA reported previously.

**Bahrain's Sitra is fully functional, with all units back on line, trading sources said. Traders had recently said that the plant was not fully back online following maintenance and a power failure. The power failure, which occurred in mid-July, resulted in a shutdown of some units at the plant, including the FCC, while the whole refinery had reduced runs to minimum levels, traders said previously.

Existing entries

**Saudi Arabia's Ras Tanura refinery is due to start full maintenance at the end of August lasting around one month, according to sources close to the company. The maintenance had been deferred several times, with the latest expected start in early August delayed due to the Eid holiday, according to sources. The company said in February it planned to commence a temporary shutdown of Ras Tanura on June 1. Previously, the refinery was expected to undergo a month-long turnaround in March. However the June maintenance has been deferred due to ongoing concerns about COVID-19 and logistics, while the plant was operating at a reduced rate, traders said.

Upgrades

New and revised entries

**Iraq's Oil Ministry said July 29 that it has obtained approval from the country's Council of Ministers to sign a deal with Japan's JGC Corporation to build a 55,000 b/d fluid catalytic cracking unit at the 210,000 b/d Shuaiba refinery near Basrah. The project, which is estimated to cost $4 billion, is expected to commence in early 2021 and take around four years to complete, the ministry said in a statement on its website. Upon completion of the FCC unit, the Basrah refinery will be able to "convert the wastes of refinery production from fuel oil to white derivatives (liquid gas, gasoline with a number of octane 92.2, gasoil, mixed naphtha, fuel oil, gasoil in hydrogenation units) with European specifications," South Refineries Company general manager Hussam Wali said in the statement. The agreement for the facility's development came under a framework provided by the Japanese International Cooperation Agency, the ministry said in the statement. JICA in mid-2019 signed a separate agreement with Iraq's Ministry of Finance for the loan of around $1 billion to upgrade the Basrah refinery, according to previous reports. The capacity of Shuaiba is due to be expanded to 280,000 b/d. The installation and construction of the fourth CDU with 70,000 b/d capacity, the LPG unit, the water treatment unit and an additional boiler, which collectively constitute the current expansion project, was at an advanced stage when the work was suspended in March due to the pandemic lockdown.

**Kuwait National Petroleum Co., or KNPC, has completed its acid gas recycling project at the country's Mina Al-Ahmadi Refinery. The initiative is part of Kuwait's Clean Fuels Project 2020, which will lead to reducing sulfur dioxide to the allowed limit -- according to the criteria of the Environment Public Authority -- and turn hydrogen sulfide into sulfur before sending them to sulfur handling facilities for export purposes. In late June, it commissioned a water cooling and fuel gas line at Mina Abdullah, paving the way for completing the clean fuels project at Mina Abdullah, according to the company. As part of KNPC's clean fuels project, the old processing facilities at Shuaiba refinery will be retired. Work on the clean fuels project has been going on since 2014. It will see Mina al-Ahmadi and Mina Abdullah refineries integrated into a single complex with 800,000 b/d capacity.

Existing entries

**Bahrain Petroleum Co.'s expansion of its Sitra refinery has been delayed "due to COVID-19 and its impacts as global pandemic situation", the company said without specifying details. The project, whose original timescale was four years, has been slated for completion in 2022, but the plan has changed. One of the main objectives of the expansion project, the company said, is to increase the capacity of the refinery by 42% from 270,000 b/d to 380,000 b/d. The project also includes a new residue hydrocracker, hydro-desulfurization unit, crude distillation unit and vacuum distillation unit among others, S&P Global Platts reported previously.

**Iran's Isfahan oil refinery will upgrade its diesel unit in less than a year, oil ministry news service Shana reported. Morteza Ebrahimi, managing director of Isfahan Oil Refinery, said: "The plant's diesel standards will match level Euro 5, once the diesel purification unit goes on stream at the end of the current Iranian year (March 20, 2021)."

**Iran's Persian Gulf Star condensate 420,000 b/d refining capacity will be raised by 60,000 b/d by September, said MD Mohammadali Dadvar of the Persian Gulf Star Refinery, as reported by the country's Shana news agency. "At the moment, average daily feedstock that enters the refinery is 420,000 barrels of gas condensates. This volume will reach 480,000 b/d end of the [Iranian] month of Shahrivar by completion of the equipment that is under construction now," he said.

**Iran will accelerate the expansion and upgrade of the Shiraz refinery in the new Iranian year, the country's state television reported. 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. The two phases are due to become operational by next March.

**Phase 2 of the upgrade at Iran's Abadan refinery, which includes modernizing units for the production of Euro 4 and Euro 5 compliant products, started in February 2017. Phase 2 involves stabilizing the current production capacity and improving the quality of products. It 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%.

**Iran's Bandar Abbas and Imam Khomeini refineries will build coke plants, according to local media reports. 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, mostly of needle coke.

**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, production of which amounts to around 1.2 million l/d. 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, was quoted as saying. 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.

**The Abu Dhabi National Oil Co., or ADNOC, and India's Reliance Industries signed an agreement to explore development of an ethylene dichloride facility in Ruwais. The facility would be adjacent to the Ruwais integrated refining and petrochemical site, with ADNOC supplying ethylene to the potential joint venture and RIL delivering operational expertise and "entry to the large and growing Indian vinyls market," ADNOC said.

**Abu Dhabi National Oil Co. will look to bring in partners for its new refinery project in the industrial hub of Ruwais as part of plans to boost refining capacity to 1.5 million b/d by 2026. ADNOC Refining currently has a processing capacity of crude and condensate exceeding 922,000 b/d. ADNOC awarded Scotland-based Wood an $8 million contract to deliver pre-front end engineering and design (pre-feed) for the new refinery project in Ruwais, which is expected to have a capacity of 600,000 b/d.

**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 engineer CB&I has been awarded a $95 million contract for the expansion and modernization of Sasref.

**Iraq has agreed to a $1 billion soft loan with Japan to fund a landmark fluid catalytic cracking complex at the Basra refinery. The Japan International Cooperation Agency said the new plant was expected to process 55,000 barrels per stream day of residue crude from the crude distillation unit in the existing Basra refinery. The complex is targeting a 2024 completion date. Separately, throughput at Shuaiba is set to rise to 280,000 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.

**Jordan Petroleum Refinery Co. has awarded a contract to US engineer 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

**Saudi Aramco expects to begin processing crude at its Jazan refinery by the first quarter of 2021, CEO Amin Nasser said Aug. 10. The newly constructed refinery refinery, also spelled Jizan, will start with crude runs of 200,000 b/d before ramping up to 400,000 b/d, Nasser said during an earnings call with analysts, though he did not give a timeline. 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. The refinery, in the far south of Saudi Arabia on the Red Sea about 60 km from the Yemeni border, has been targeted in several missile attacks by Iran-backed Houthi rebels in Yemen, though Saudi officials say they have intercepted each attempted strike.

Existing entries

**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 and included 14 oil storage tanks with capacity of 2.5 million barrels.

**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 said, quoted by official news agency IRNA. According to oil ministry news service Shana, the Anahita refinery has been designed to process 150,000 b/d of crude oil. "Up until now, shares of Anahita refinery have not been decided and were under affiliation companies of the Cooperative and Oil Ministries," Bazvand said. "A private company has bought 67% of the shares of this refinery from subsidiaries of the Cooperative Ministry. It will soon start construction of Anahita refinery with cooperation of the Oil Ministry and the National Iranian Oil Products Refining and Distribution Company," Bazvand said without revealing the name of the private company.

**Kuwait Integrated Petroleum Industries Co. has awarded Honeywell a contract to expand the Al-Zour refinery, Honeywell UOP said. Honeywell UOP will revise the configuration and capacity of the gasoline production facilities and will also supply licenses and design services and key equipment "to produce clean-burning fuels, paraxylene, propylene and other petrochemicals." The gasoline section will include a 98,000 b/d RFCC complex, a UOP Selectfining unit for the production of low sulfur gasoline components as well as two UOP Merox for treating propane for propylene production and isobutane for clean-fuels blending components. The CCR platformer and naphtha hydrotreater have been expanded "to meet the needs of the larger gasoline and aromatics complexes." The petrochemical section will include an aromatics complex with capacity to produce 1.4 million mt/year paraxylene. The 615,000 b/d refinery is targeted for completion by 2020. The petrochemicals complex at Al-Zour is due for completion in 2023, with start-up expected in 2024.

**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. Though the contract would be between Pacific Future Energy and the oil ministry, it would be supervised by state-owned South Refineries Co.

**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 has 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.