Downstream Petroleum Sector
“The Growing Prominence of Asian Refining”
Mr. Fahad Al-Dihani
Deputy CEO,MAA Refinery,
Kuwait National Petroleum Company-Kuwait
Outline..
• Global refining trends
• Kuwait’s Position in petroleum sector
• Introduction to KPC and subsidiaries
• Role of KNPC as downstream sector
• Opportunities and Challenges
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Expected Global economic growth up to 2020. . .
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Refined Product Demand Growth by Region
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Asia accounts for about half of the world’s total refined
product demand growth . . .
4
Year-to-Year Change, Million Barrels per Day
GDP %
8
3
6
2
4
1
2
0
0
Rest of the World
Total Asia
Asia GDP
-1
-2
-2
-4
2000
2005
2010
2015
2020
Note: Asia region depicted in this chart includes Asia and Oceania.
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Asia Gasoline Demand and Quality Changes
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Asia Diesel Demand and Quality Changes
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60% of Announced Capacity is in Asia / Middle East
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Middle East Refined Product Demand Growth
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OPPORTUNITIES AND CHALLANGES
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A Subsidiary of Kuwait Petroleum Corporation
Kuwait Position in Oil and Gas Sector
• 5th Largest producer of crude oil among OPEC countries
• 10th largest producer of petroleum and other liquid products in the world
in year 2015
• 70% of country economy is based on petroleum revenues
• Produces about 2.8 million barrels of crude per day, target for year 2020
is to produce about 4.0 million barrels of crude per day
• 80% crude Exports to Asia Pacific
As above, Kuwait plays a significant role in petroleum sector globally
and specifically in Asia Pacific
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Kuwait Petroleum and other liquid production
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Kuwait Crude Oil Export Destination, Jan to Aug 2016
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Kuwait Petroleum Products Export Destination
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Subsidiaries of Kuwait Petroleum Co.
KUWAIT FOREIGN
PETROLEUM
EXPLORATION COMPANY
KUAWAIT OIL COMPANY
KUWAIT NATIONAL
PETROLEUM COMPANY
KUWAIT AVIATION
FUELLING
Domestic
International
PETROCHEMICAL
INDUSTRIES COMPANY
KUWAIT GULF OIL COMPANY
KUWAIT PETROLEUM
INTERNATIONAL
KUWAIT OIL TANKER
COMPANY
KPC was established in 1980, fully owned by the State of Kuwait
8 specialized Subsidiaries operate in Kuwait and across the world
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Position of KNPC in Value Chain of Kuwait
Feedstock supply
Domestic Refining
Sour Gas
Natural Gas &
Condensate
LNG imports
Gas
Sweetening
Sweet Gas
Fuel demand
Gas
processing
3 X 560 MM SCFD
Gas for
Power
Generation
Oil sector requirements
(KNPC, KOC, PIC)
Crude Oil
Refining
Kuwait
Energy
Balance
Fuel Oil &
Gas Oil for
Power Generation
Ministry of
Electricity and
Water (MEW)
Transportation
& industrial
(domestic &
international)
936,000 BPD
Domestic : 300 - 400 M BPD
Export : 500 - 600 M BPD
Most of products exported
to Asian Region
KNPC is responsible for Domestic Refining & Gas Processing to satisfy the local fuel demands for Power
Generation, Transportation, Industries & supply products for International market
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Refinery – Petrochemicals Current Integration
Petrochemicals
Propylene
PC Exports
Polypropylene
Ethane
Gas
Refineries
Oil & Gas
Production
Crude
Ethylene
& Polyethylene
&
Gas Plant
Full Range
Naphtha
H2, C4,
Light Naphtha
Benzene,
Para-xylene &
Styrene
Current Integration level would be enhanced with increased operational flexibility and additional
feed-stocks, to improve Refining Margin and achieve enhanced performance.
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Opportunities:
Investments In Downstream Mega Projects in Kuwait to
produce Euro IV products
•
Clean Fuels Project : To upgrade existing refineries to meet the
Euro IV product specifications. Enhance conversion capacity with
minimum Bunker Fuel Oil
(14 Billion USD).
•
ZOR Refinery & Petrochemical : To process heavier crudes to meet
the Low Sulfur Fuel Oil demand and produce Euro IV product
specification.
(ZOR Refinery Project 12 Billion USD, Petrochemical project under
feasibility study)
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Opportunities:
Investments in Asia to meet regional demands
• KPI / Sinopec New Refinery Project in China :
New refinery with a capacity of 260 KBPD with
an investment of 6 Billion USD ( Under
Feasibility Stage).
• KPI / Petrovietnam New Refinery Project in
Vietnam : New refinery with a capacity 200
KBPD with an investment of 9 Billion USD ( At
advanced stage of mechanical completion).
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Opportunities: Euro IV product profile
Key Products Specifications – Post CFP
Products
Current
Plan
Gasoline (91, 95 & 98 UL )
Sulfur w ppm (max)
Benzene/ Aromatics/
Olefins, v% max.
500
ppm
4/- / -
10 ppm
1 /35 /18
Gas Oils
Sulfur wt% (max)
MEW Fuel Oil
Sulfur, wt% (max)
0.2% &
0.5%
500
ppm
4.2 %
10 ppm
1.0 %
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Outlook for Downstream Refining : 2030
1. Grow Refining capacity up to 1.4 million BPD from existing
Capacity of 936 KBPD.
2. Meet local & international Fuel demand for Transportation and
Industrial sectors.
3. Maximize domestic processing of Heavy / Sour crudes –
according to upstream heavy crude availability profiles.
4. Achieve Operational Excellence through enhancing complexity.
5. Integrate with Petrochemicals to improve overall margins.
6. Provide required Gas Processing capacity according to upstream
Gas availability profiles.
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KPC /KNPC Potential Partnership/ Opportunities in
Growing Prominence of Asian Refining Sector
• Investment in Asia to meet growing demand of petroleum
products.
• Export of petroleum products based on global product
specifications.
• Export of Kuwaiti Crude Oil.
• Sharing of Best practices in downstream sectors for
Operational Excellence.
• Partnership in R&D projects to develop refining technologies.
• Knowledge sharing forums to develop manpower assets.
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Potential Challenges for Middle East Refiners
• Sustain Competitive Edge over refining companies in the
region
• Developing competent manpower and retain for operational
excellence
• Improvement in Energy Efficiency and other OPEX
• Safe commissioning of mega projects (CFP/NRP)
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Thank you
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