London — Saudi Arabia's domestic crude oil stockpiles have climbed to the highest since the coronavirus pandemic hit the market hardest in April, with analysts saying Asian refineries are struggling to keep up with term commitments.
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Saudi crude stockpiles were 78 million barrels as of Sept. 23, the highest since April 26, according to data analytics firm Kpler.
The kingdom's crude stockpiles are climbing because of weak refining margins, relatively high official selling prices for September cargoes and shrinking domestic consumption, according to Zhuwei Wang, lead Middle East analyst at S&P Global Platts Analytics in Dubai. Maintenance at the Ras Tanura refinery also boosted inventories with "external demand remaining weakened," he said.
Separately, Saudi Aramco said reports that its Jizan refinery had shipped a refined product cargo to Singapore are inaccurate. "The shipment from Jizan refers to a product cargo from storage which had initially originated from another location," the company said Sept. 29. Aramco CEO Amin Nasser said in August that first processing at Jizan was expected to begin by the first quarter of 2021.
NEW AND ONGOING MAINTENANCE
New and ongoing maintenance
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** Bahrain's Sitra is planning works from the first week of October, according to market sources. The maintenance, which is due to involve multiple units, should be completed in early November.
** Iran's Arak, also known as the Imam Khomeini oil refinery, located in Shazand, said in a Telegram message that it finished the overhaul of the refinery on Sept. 24 after 46 days. "We are pleased that today...with help of 3,400 work force hired specially for the overhaul and partially from Abadan oil we succeeded in completion of the biggest overhaul of the refinery," according to Sha'ban Faraji, head of the refinery's public relations office. "Eleven operational units including RCD and RFCC underwent basic overhaul... without any incident or any coronavirus infection," Faraji said. The refinery had previously noted it was undergoing planned maintenance, which would continue in three stages. The maintenance started Aug. 10, with 3,400 workers expected to be involved at the work's peak.
**Syria's Banias refinery has started a 20-day maintenance, Syrian oil and mineral resources minister Bassam Touma was quoted as saying in an interview with Syrian TV, by the official Sana news agency. It is due to be completed by the end of September. Maintenance on such a scale has not been conducted at the refinery for seven years. Banias supplies two-thirds of Syria's gasoline needs, Touma was quoted as saying.
**Kuwait National Petroleum Co's Mina Al-Ahmadi refinery is currently carrying out work on some of its units, sources close to the matter told S&P Global Platts. The work includes the hydrotreater, atmospheric residue unit and a coker. According to some traders, a reformer was undergoing minor work in August, although currently both reformers, at around 16,000 b/d each, are operating.
**Saudi Arabia's Ras Tanura refinery is due to come back at the end of September, after starting full maintenance at the end of August, according to trading sources. The maintenance had been deferred several times, with the latest expected to start in early August delayed due to the Eid holiday, sources said. 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 was deferred due to coronavirus and logistics concerns, while the plant was operating at a reduced rate, traders said.
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** Qatar Petroleum on Sept. 27 said it has begun producing ULSD from its refinery in Mesaieed for the domestic transportation market. The ULSD is a higher grade and cleaner premium diesel fuel, which meets the European Emission Standard Euro 5 specifications. The start of ULSD production follows the upgrade of the QP refinery's diesel hydrotreating units, resulting in a maximum of 10 ppm sulfur diesel, the company said. "This important step is an integral part of Qatar Petroleum's strategy of maximizing the added value of Qatar's downstream businesses, and delivering on our commitment to protect and enhance the environment," QP said.
**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 gas oil, deputy oil minister told S&P Global Platts Sept. 17. The ministry plans to rehabilitate and develop the Baiji complex north of Baghdad, where three refineries were damaged during the war with the self-styled 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.
**Japan's JGC Holdings Corporation has announced that it has officially received the letter of award for upgrading Iraq's Shuaiba refinery near Basrah in Southern Iraq, with the scheduled completion date slated for 2025, the company said in a statement on its website. At the end of July, the oil ministry said the Council of Ministers has approved the project. The project aims to convert the excess fuel oil produced by the existing refinery units, which is currently 45% of the yield, too much light products for which there is a greater need. The upgrading work will, among other things, entail the development of a 34,000 b/d fluid catalytic cracking unit, 55,000 b/d vacuum distillation unit and a 40,000 b/d diesel desulfurization unit on "on land adjacent to the existing Basrah refinery," the statement said. The new facilities will increase "production [at the Basrah refinery] to 19,000 b/d of gasoline and 36,000 b/d of diesel" the statement said, adding that the upgrades would "reduce the gap between supply and demand for petroleum products." 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.
**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 and further reduce the country's dependence on imported fuel.
**The desulfurization unit at Iran's Isfahan oil refinery will go on stream in four years, the refinery managing director Morteza Ebrahimi said in August, according to state news agency IRNA. "This refinery will have all its products produced matching Euro 4 and Euro 5 standards by 2025," Ebrahimi said. Isfahan's plant produces 12 million liters a day of gasoline matching Euro 5 level and 22 million liters/d of gasoil, of which 2 million complies with Euro 5 norms. Once the purification plant for gasoil is completed in 2021, the plant will be producing more than 20 million liters/d of Euro-5 gasoil.
**Abu Dhabi National Oil Co. reported Aug. 17 "significant progress" on the crude flexibility project, or CFP, at its Ruwais refinery, with "73% project delivery" of the ongoing upgrade. Much of the physical infrastructure required for the project has been installed, including two new fractionators and 24 atmospheric residue desulfurizer reactors. The fractionators would "serve to separate the component products within the crude oil to allow for further refining," ADNOC said. The new CFP project will allow Ruwais, which has predominantly refined Murban crude, to process Upper Zakum "along with over 50 other types of different crudes," it added. ADNOC announced plans to diversify the feedstocks it processed in 2018. The $3.5 billion project is a "core driver" of its 2030 smart growth strategy, it said. 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. The refinery has total capacity of around 840,000 b/d.
**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.
**Bahrain Petroleum Co.'s expansion of its Sitra refinery has been delayed "due to the coronavirus and its impact as a global pandemic," the company said, without giving details. The project, whose original timescale was four years, had been slated for completion in 2022, but the plan has changed. One of the main objectives of the expansion project, the company said, was to increase the capacity of the refinery by 42% 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.
**Iran's Persian Gulf Star's 420,000 b/d condensate refining capacity will be raised by 60,000 b/d by September, Managing Director Mohammadali Dadvar was quoted as saying by oil ministry news service Shana.
**Iran will accelerate the expansion and upgrade of the Shiraz refinery in the new Iranian year, 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 to produce 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 liters a day (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 liters/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, 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 engineer 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 engineer 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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** Iran's Khatam al-Anbiya has started construction work on a 120,000 b/d plant to process gas condensate from the massive offshore South Pars gas field, state television reported. 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 country's elite Islamic Revolution Guard Corps (IRGC). "We carried out ground breaking today for the first fully-Iranian petro-refinery, which can be both complementing South Pars to receive its gas condensate and also very strategic primary products in the fields of detergents, industries and petrochemical industries," Mohammad said. "The investor of the Persian Gulf Mehr petro-refinery is Khatam al-Anbiya...with cooperation of private sector consultants, contractors and manufacturers of equipment," he added. Khatam al-Anbiya was also the primary builder of the Persian Gulf Star plant, located close to where Mehr is being built.
**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 has also signed a contract with PowerChina and Norinco about the 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.
**Fluor Corporation said that 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. "Timely delivery of the new Al-Zour Refinery is critical to the Kuwait economy. Our team worked closely with KIPIC to continue with about 15,000 workers on site to maintain progress throughout the COVID-19 pandemic," Fluor said in a statement. The refinery has been targeted for completion in 2020. The petrochemicals complex at Al-Zour is due for completion in 2023, with start-up expected in 2024.
**Saudi Aramco expects to begin processing crude at its Jazan refinery by Q1 2021, CEO Amin Nasser said Aug. 10. The newly constructed 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 (37 miles) 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.
**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 2021and 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 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. "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.
**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'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. 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. Work has yet to start on the 150,000 b/d Missan refinery in Iraq.
**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.