MEED magazine revealed that the Kuwait Integrated Petroleum Industries Company expects to start exporting refined products from the $16 billion Al-Zour refinery in late October or early November, while the magazine quoting a reliable source said, “some minor tests of export products are expected in the coming weeks”.
A local Arabic daily, said the intention is to export products from Al-Zour refinery to international markets at the end of October or early November, and everything seems to be going well.”
The refinery, which is set to become one of the largest of its kind in the Middle East and North Africa region, will produce gasoline, diesel and kerosene, in accordance with Euro 5 emissions standards and the project consists of five main packages, noting that the engineering, procurement and construction contracts were awarded during the second half of 2015, with contractors starting work on their packages at the end of that year.
The oil refining facility was mechanically completed last year, but it faced significant delays in the commissioning process. Over recent years, Covid-19 and related measures designed to limit the spread of the virus have affected the progress of the project. The project was on track to go online in early 2021. Last year, Quebec secured some special travel waivers for essential workers needed to operate the facility to enable the commissioning process to continue to progress.
In the meantime, the MEED magazine has reported that KIPIC may make new decisions on its planned major project, Az-Zour Petrochemical Complex, in the coming weeks, as there has been little in the form of announcements or progress on the project, which it estimated to cost $10 billion to build over the past 12 months.
This could change over the coming months, as UK-based research and advisory group Wood Mackenzie is set to complete a feasibility study for the project. The report, which will be delivered to KIPIC, is expected to look at supply and demand in the global petrochemical market, and suggest how the Al-Zour facility can be better configured to meet demand and generate revenue.
Rather than rethinking the feasibility of the project after major contracts are awarded, conducting the study at this stage is a wise move that could reflect how the international petrochemical market has changed, allowing KIPIC to adjust its investments accordingly.
MEED indicated that the ongoing study has delayed the project’s arrival in the market, but the global petrochemical market has changed significantly since the project’s inception, saying making drastic changes later, when the project is in the implementation phase, can be more costly.
Over recent years, several factors have changed oil markets and the pricing of final products in a fundamental way. These factors include the corona virus pandemic, the ongoing energy transition, and Russia’s military offensive against Ukraine.
Many contractors believe that by reconsidering options for the future of the facility, KIPIC is likely to make the planned Az-Zour petrochemical complex more suitable and competitive in the international market over its lifetime.