Refinery news roundup: Middle East news revolve around upgrades

London — In the Middle East news is mostly focused on planned upgrades and new launches. In Iran, all refineries are set to undergo work in the current Iranian year ending March 2019.

EXISTING ENTRIES

-- Yanbu Aramco Sinopec Refining Co. (Yasref) shut its 85,000 b/d continuous catalytic reformer mid-August, halting gasoline production, sources close to the company said. The unit is part of the 400,000 b/d refining complex, a joint venture by Saudi Aramco and China's Sinopec on Saudi Arabia's Red Sea coast. The company was not available for comment.

-- Iran is set to stagger its refinery turnarounds in the current Iranian year to March 2019. Four of the country's refineries -- Abadan, Arak, Isfahan and Tabriz -- were due to undergo maintenance in the spring. All of the country's other refineries will also carry out turnarounds in the current Iranian year.

FUTURE WORK

-- South Korea's GS Engineering & Construction Co. has won a contract to repair units at the Ruwais refinery in the UAE damaged in a fire in January 2017. GS said it will restore fire-damaged parts of the oil processing plant at Ruwais by early 2019.

UPGRADES

EXISTING ENTRIES

-- State-owned Kuwait National Petroleum Corp. lit the first new flaring stack at the Mina al-Ahmadi refinery in early September, as its long awaited Clean Fuels Project draws to a close. The lighting of the flare will allow fuel gas to be pumped into the main feed pipeline at the Mina al-Ahmadi refinery, before pilot operations at new secondary units can begin, KNPC said in a statement. This is a prelude to starting operations at the refinery's new main units. Contractors have been working on the Clean Fuels Project since 2014 revamp and expand capacity at the Mina al-Ahmadi and Mina Abdullah refineries. The two refineries are being integrated into a single complex, with new units added to improve the quality of products. The older 200,000 b/d Shuaiba refinery, which sits between the two refineries, was permanently shut in January.

-- Iran plans to expand its Persian Gulf Star refinery, adding a fourth phase of facilities at the country's leading gasoline production complex over the coming years, National Iranian Oil Products Refining and Distribution Co. said in early September. The new phase would boost capacity at the Persian Gulf Star condensate refinery to 420,000 b/d. It currently has two operational phases, with a third due onstream this month which will take total processing capacity to 360,000 b/d. NIORDC said in a statement it was nearing the completion of phase three, and operations were expected to start in the month of Mehr, which began September 23. "With construction of this phase (4), a [additional] daily amount of 120,000 b/d of gas condensates will be processed to produce Euro 5 grade gasoline and diesel fuel," NIORDC said. Following the full launch of Persian Gulf Star, Iran expects that 80% of its gasoline and 70% of its diesel will meet Euro 4 and Euro 5 (10 ppm max sulfur content) standards. -- Iraq has restarted operations at the 70,000 b/d Salah al-Din-2 refinery, more than four years after it was taken over by Islamic State militants, the oil ministry said in early September. Salah al-Din-2 is one of the main crude processing facilities inside the giant Baiji complex, located around 250 km north of Baghdad. Baiji, which was Iraq's largest and most modern refining center with a capacity of around 310,000 b/d, consists of the Salah al-Din-1 and Salah al-Din-2 refineries along with the 150,000 b/d North refinery, as well as some small 10,000 b/d units. The complex was occupied by IS militants for more than two years from June 2014 until it was liberated in mid-2016 by Iraqi forces. The occupation, fighting, and subsequent looting caused extensive damage, leaving many Iraqi sources to believe the facility was completely beyond repair. But after months of work to repair and rebuild the refinery, with no international help, the oil ministry was planning to push ahead with the rehabilitation of other damaged units. That would raise total capacity to 350,000 b/d, although further repairs may not be as easy. The Baiji consists of three major units: the two Salah al-Din plants and the 150,000 North Refinery. The latter was extensively damaged and may be beyond repair. Some of the units from Salah al-Din-1 were cannibalized to repair Salah al-Din-2. To make any further progress and rehabilitate the other two units would need considerable investments, time and expertize. -- Iran will add another 6 million liters/day of diesel to its production after upgrading the desulfurization unit at the Tabriz refinery, a senior oil official said. "Considering the low capacity and old technology of the diesel desulfurization unit, a newer unit with higher capacity and technology was designed to produce diesel with up-to-date standards," Gholamreza Bagheri, managing director of Tabriz Oil Refinery, was quoted as saying by oil ministry news service Shana. Trial production has begun at the newly upgraded unit and, once complete, it will add 6 million liters/day of Euro 5 diesel production capacity, Bagheri said. "This unit has been built with an investment of Eur42 million ($49 million) and Rials 787 billion ($10 million) under the license of France's Axens. Local contractors have carried out the detailed engineering, procurement and installations," he said. The upgrade is part of a broader upgrade project at the Tabriz refinery, costing Eur1.5 billion, to raise the quality of its products to Euro 5 standards.

-- Saudi Arabia's Rabigh Refining and Petrochemical Co. is studying a project to convert fuel oil into diesel and other higher value products, the company said Sunday. The company plans to build two new units, with a capacity of up to 75,000 b/d, and will invite contractors to bid for the project's initial engineering studies, Petro Rabigh said.

-- Abu Dhabi has outlined a new downstream expansion plan to boost its refining capacity by more than 65% by 2025, with the construction of a new 600,000 b/d refining complex. It has also asked international contractors to submit bids in September for the construction of a major new facility to boost gasoline and aromatics production at the Ruwais refinery. Technical bids were due by Thursday, September 6, while priced bids are to be submitted November 6. The project will expand existing gasoline production units at Ruwais, boosting gasoline production to 9.4 million mt/year by 2022, from 5.2 million mt/year currently.

-- Iran expects to continue upgrading its refineries, apart from Arak where the modernization has already been completed. Investments in those projects are expected to be approved in the next Iranian year, which starts in March 2019. The country has so far signed contracts for development of the Tehran and Bandar Abbas oil refineries with Japan's JGC, Marubeni and Chiyoda-Dailim-Mitsui. An upgrading project is under way at Abadan in partnership with China's Sinopec. Separately, there are memorandums of understanding with Daelim for an RFCC/RCD unit at the Isfahan refinery, and with South Korea's SK and Italy's Tecnimont for Tabriz. But Iran's plans to attract international investment to upgrade its downstream sector was dealt a blow when South Korean contractor Daelim Industrial pulled out of a Eur1.83 billion deal to build new facilities at the Isfahan (Esfahan) refinery, citing the return of US sanctions on the country. The US sanctions could also affect other South Korean projects in Iran. SK E&C signed a $1.6 billion deal in August last year to renovate and upgrade the gasoline and diesel manufacturing facilities in the Tabriz oil refinery complex, northwest of Tehran. "We are still waiting for final approval from the Iranian government for the project with uncertainties over renewed US sanctions," an SK E&C official said.

-- Iraq has added another 10,000 b/d of refining capacity after completing the rehabilitation of a crude distillation unit 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.

-- Bahrain Petroleum Co. has awarded a $4.2 billion contract for the expansion and modernization of the Sitra refinery, slated for completion in 2022 and taking total capacity to 360,000 b/d.

-- Iraq has started work on a 70,000 b/d expansion of its Basra refinery, in the south of the country, raising its capacity to 280,000 b/d from 210,000 b/d, with the addition of a fourth crude unit. The oil ministry hopes to complete the new distillation unit by the end of 2018.

-- US engineer CB&I has been awarded a $95 million contract for the expansion and modernization of the 305,000 b/d Saudi Aramco Shell Refinery (Sasref) in Jubail.

LAUNCHES

EXISTING ENTRIES

-- Kuwait's newest refinery is set to start operations in the next two years, but the Gulf state is already planning new units to produce cleaner products and minimize fuel oil production, as it switches to gas for power generation. The new 615,000 b/d Al-Zour refinery, set for completion in 2020, will boost Kuwait's total refining capacity to 1.4 million b/d. It was originally intended to process heavy crude from the north of the country to produce low sulfur fuel oil for power generation but the Ministry of Electricity and Water is now pushing for gas as the main source of feedstock for power generation. The plans for the new units at Al-Zour are still in their early stages, industry sources in Kuwait said, with engineering, procurement and construction tenders not expected until late 2019. Separately, Honeywell said Kuwait Integrated Petroleum Industries Co. will use a range of its technologies for the refining and petrochemical complex at Al-Zour.

-- 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 orientated 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 in February 2018 it signed a contract with Rania International. It has also added 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, territory previously occupied by 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 stalled due to a lack of finance. Work is also yet to start on the 150,000 b/d Missan refinery.

-- Iraq is considering a 150,000 b/d greenfield refinery project at Nassiriya.

-- Houston-based GTC Technology has agreed 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.

-- Kuwait has committed itself to building a new 230,000 b/d refinery at Duqm with its Persian Gulf neighbor Oman, signing a final investment decision for the refinery project.

-- Saudi Aramco aims to start up its greenfield 400,000 b/d Jizan refinery in the second half of 2018 as the project has been nearly completed.

--Elza Turner, elza.turner@spglobal.com

--Edited by Maurice Geller, maurice.geller@spglobal.com