Downstream Petroleum Sector“The Growing Prominence of Asian Refining”
Mr. Fahad Al-Dihani
Deputy CEO,MAA Refinery,
Kuwait National Petroleum Company-Kuwait
2إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation2
Outline..
• Global refining trends
• Kuwait’s Position in petroleum sector
• Introduction to KPC and subsidiaries
• Role of KNPC as downstream sector
• Opportunities and Challenges
3إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation3
Expected Global economic growth up to 2020. . .
4إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation4
Refined Product Demand Growth by Region
5إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation5
Asia accounts for about half of the world’s total refined product demand growth . . .
Year-to-Year Change, Million Barrels per Day
2000 2005 2010 2015
Note: Asia region depicted in this chart includes Asia and Oceania.
GDP %
-2
-1
0
1
2
3
4
2020
-4
-2
0
2
4
6
8
Rest of the World
Total Asia
Asia GDP
6إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation6
Asia Gasoline Demand and Quality Changes
7إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation7
Asia Diesel Demand and Quality Changes
8إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation8
60% of Announced Capacity is in Asia / Middle East
9إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation9
Middle East Refined Product Demand Growth
10إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation10
OPPORTUNITIES AND CHALLANGES
11إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation11
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
12إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation12
Kuwait Petroleum and other liquid production
13إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation13
Kuwait Crude Oil Export Destination, Jan to Aug 2016
14إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation14
Kuwait Petroleum Products Export Destination
15إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation15
Domestic
KUAWAIT OIL COMPANY
KUWAIT GULF OIL COMPANY
KUWAIT AVIATION
FUELLING
PETROCHEMICAL
INDUSTRIES COMPANY
KUWAIT OIL TANKER
COMPANY
KUWAIT NATIONAL
PETROLEUM COMPANY
Subsidiaries of Kuwait Petroleum Co.
KUWAIT PETROLEUM
INTERNATIONAL
KUWAIT FOREIGN
PETROLEUM
EXPLORATION COMPANY
International
KPC was established in 1980, fully owned by the State of Kuwait
8 specialized Subsidiaries operate in Kuwait and across the world
16إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation16
Position of KNPC in Value Chain of Kuwait
Domestic Refining
KuwaitEnergyBalance
Gas for
Power Generation
LNG imports
Oil sector requirements(KNPC, KOC, PIC)
Feedstock supply
Crude Oil
Natural Gas & Condensate
Fuel demand
Transportation
& industrial
(domestic &
international)
Ministry of
Electricity and
Water (MEW)
Fuel Oil & Gas Oil for
Power Generation
Gas processing
Refining936,000 BPD
3 X 560 MM SCFD
Domestic : 300 - 400 M BPDExport : 500 - 600 M BPD
Most of products exported to Asian Region
Gas Sweetening
Sour Gas
Sweet Gas
KNPC is responsible for Domestic Refining & Gas Processing to satisfy the local fuel demands for Power
Generation, Transportation, Industries & supply products for International market
17إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation17
Current Integration level would be enhanced with increased operational flexibility and additional feed-stocks, to improve Refining Margin and achieve enhanced performance.
Refineries
&
Gas Plant
Oil & Gas Production
PC Exports
Polypropylene
Propylene
EthaneGas
Crude Full RangeNaphtha
Ethylene & Polyethylene
Benzene, Para-xylene &
Styrene
H2, C4,Light Naphtha
Petrochemicals
Refinery – Petrochemicals Current Integration
18إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation18
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)
19إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation19
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).
20إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation20
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)
0.2% &
0.5%
500
ppm
10 ppm
MEW Fuel Oil
Sulfur, wt% (max) 4.2 % 1.0 %
21إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation21
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.
22إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation22
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.
23إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation23
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)
24إحدى شركات مؤسسة البترول الكويتيةA Subsidiary of Kuwait Petroleum Corporation24
Thank you
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