London — Some of the maintenance in the Middle East has been completed with the Ruwais refinery restarting after works while demand starts rising with countries easing lockdowns.
Demand for gasoline is set to rise sharply in Saudi Arabia and outperform other refined oil products in coming months, traders said, with the kingdom set to ease its lockdown.
"As Saudi starts easing lockdowns we will see a big impact as it is the engine behind gasoline demand in the region," a Middle East trader said.
In other news, Iran's Bandar Abbas Oil Refinery launched the construction of six oil products storage tanks in a bid to keep production going, as fuel consumption in the time of coronavirus has lowered, official news agency IRNA reported.
Hashem Namvar, managing director of Bandar Abbas Oil Refinery, said: "These tanks include two for gasoline with floating roof, and four fixed-roof type for diesel. Each has 250,000 barrels storage capacity."
"With construction of new tanks, byproducts storage in the refinery will totally rise by 1.5 million barrels. And this will lower risk and keeps production process going on," he added.
"This raises storage volume by 10 days," he said, according to oil ministry news service Shana.
The project will also assist in the big storage tank construction plan for the refinery's coke unit.
Bandar Abbas is in the process of building a new coker aimed for completion within three years. In 2018, gasoline and gas oil production capacity in the oil refinery increased to 12 million l/d and 15 million l/d, respectively. The project also upgraded the quality of the fuels so that gasoline matches Euro 5 standards and diesel meets Euro 4 norms. The Bandar Abbas plant, built in 1997, had an original capacity at 232,000 b/d which was raised eventually to 350,000 b/d in 2012.
New and ongoing maintenance
New and revised entries
**Scheduled maintenance at Saudi Arabia's Petro Rabigh has been completed and the refinery is back in operation, the company said. The maintenance at the plant started March 1.
Existing entries
**The Ruwais refinery is "gradually restarting" following planned maintenance, ADNOC said. Work at the site started in February, according to market sources. ADNOC had said previously that it would carry out scheduled routine maintenance at its Ruwais facility in early 2020. Eni and OMV, which acquired shares in ADNOC's refining capacity last year, earlier said that the maintenance has been completed. The refinery has restarted as China is recovering from the coronavirus crisis and is hence "ready to supply the Far East where the crisis is finishing and the consumption is increasing" following the COVID-19 outbreak, Eni said. Eni estimates refinery throughput in Q2 at around 60% as the maintenance was completed in April and the refinery is slowly ramping up "in parallel with the growth of the consumption." Full utilization is expected in the second half of the year.
**Works at Bahrain's Sitra are now pushed back to May, market sources said. Bahrain's Bapco was due to halt its Sitra refinery for partial works around mid-March, according to sources close to the matter. Market sources had said they expected the works to last around three weeks.
**The already announced delay of Ras Tanura's maintenance from March to June may also be due to coronavirus precautions, according to sources. Saudi Aramco confirmed in late February that it plans to commence the "temporary shutdown" of Ras Tanura on June 1. Previously, the refinery was expected to undergo a month-long turnaround in March. Saudi Aramco said that as a response to the COVID-19 outbreak it is monitoring "the situation closely every day, site-by-site, country-by-country" and added that "at each operating site, our prevention and contingency plans are designed to ensure business continuity, so that we can continue to supply the world with the energy it needs".
**State-owned Kuwait National Petroleum Co. will take an atmospheric residue desulfurization unit offline at its Mina Al-Ahmadi refinery for a month-long turnaround in April, sources close knowledge of the matter said. The 33,000 b/d unit was originally scheduled to undergo turnaround in early March but the works were delayed due to unknown reasons. KNPC could not be immediately contacted for comment.
Upgrades
Existing entries
**The Iraqi oil ministry was hoping to expand the capacity of Shuaiba to 280,000 b/d this year, from 210,000 b/d, though this upgrade project could now be delayed due to the pandemic, sources said.
**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, Mohammadali Dadvar, managing director of the Persian Gulf Star Refinery, said, the country's Shana news agency reported. "At the moment, average daily feedstock that enters the refinery is 420,000 barrels of gas condensates. This volume will reach 480,000 barrels per day by 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.
**KNPC has completed a clean fuels project at Mina al-Ahmadi after the successful launch of the last two production units, KUNA news agency reported. The coal and naphtha hydrotreating units can produce respectively 37,000 b/d and 8,400 b/d. Operations to complete the project continue at Mina Abdullah. 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. 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.
**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 and was due to be completed 48 months later. 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.
**Bahrain Petroleum Co.'s expansion of its Sitra refinery is set for commissioning by 2022, according to a local media report. The project is 40% complete and will raise the refinery capacity to 380,000 b/d. The expansion is handled by a consortium including TechnipFMC, Samsung Engineering and Tecnicas Reunidas.
**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.
**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. The project will be delivered "to support the upcoming major refinery turnaround in 2020," KBR said. The refinery's capacity was increased by 10% in 2018, to 440,000 b/d, after major maintenance on one of its distillation units. Upon completion of the debottlenecking project, the refinery's capacity will be increased to 460,000 b/d. 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.
**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.
**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
Existing entries
**The installation of nine 900 mt LPG tanks at Oman's Duqm refinery and petrochemical complex has been completed, Turkish company Hareket Proje Tasimaciligi ve Yuk Muhendisligi said in a statement. The company was conducting the installation operation as a subcontractor for Petrofac International Ltd./Samsung Engineering Co. 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.
**UAE-based Brooge Energy, a subsidiary of Brooge Petroleum and Gas Investment Col., has appointed MUC Oil & Gas Engineering Consultancy to complete the basic design for a 180,000 b/d refinery and a Front-End Engineering Design study for oil storage terminals adjacent to the Port of Fujairah. The project comprises the company's Phase III expansion, which in addition to the refinery will more than quadruple its storage capacity for crude oil, fuel oil and clean products. The Phase III project will add 2.1 million to 3.5 million cu m of storage, compared to the company's projected 1 million cu m capacity after its Phase II expansion is completed later this year. Once complete, the refinery would be the third in Fujairah alongside units owned by Vitol and Uniper.
**Saudi Aramco's Jazan refinery on the Red Sea has not started yet, according to trading sources. The refinery was expected to begin at the end of 2019 and be ready for full operations in the second half of 2020. In January, there were media reports about missile attacks in the area of Jazan, which is close to the border with Yemen, although they had been intercepted.
**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.
