KUWAIT CITY, 15 May 2005 — State-run Kuwait National Petroleum Co. (KNPC) is to begin shortly modernizing two of its three refineries and building a new refinery at a cost of over $8 billion, an official said yesterday. “We are currently reviewing a report on modernizing the refineries at Al-Ahmadi and Mina Abdullah,” which together produce more than 700,000 barrels per day (bpd), KNPC Chairman Sami Al-Rasheed told a press conference.
The third refinery at Al-Shuaiba with a capacity of 200,000 bpd will be closed once a project to build a new refinery is completed in early 2010, Rasheed said.
“According to preliminary estimates, the (upgrade) project will cost around one billion Kuwaiti dinars ($3.4 billion) and will be completed by the end of 2010 or early 2011,” he said. The main purpose of the project is to produce “high quality refined products that meet stringent international standards”, he said.
Rasheed said that KNPC is currently negotiating with technology providers for the various units of the new refinery that is expected to cost up to five billion dollars. “We are currently examining the front-end engineering phase of the project which will end in February next year. After that bids will be invited from several contractors,” he said.
The capacity of the new refinery will range from 460,000 bpd if heavy crude is used to 600,000 bpd if medium crude is used, Rasheed said.
Once the two projects are completed, Kuwait’s refining capacity will top 1.2 million bpd, he said. The new refinery will initially produce 225,000 bpd of fuel oil needed for domestic consumption to operate power plants, and 375,000 bpd of oil products intended for export. It will however produce only oil products after Kuwait starts importing natural gas from neighboring countries to operate its power plants.
The OPEC member sits on 10 percent of the world’s proven oil reserves and it currently produces at full capacity of 2.7 million bpd. Kuwait plans to invest up to $40 billion in the next 15 years to modernize its oil sector which generates more than 90 percent of public revenue.
