SINGAPORE: Kuwait Petroleum Corp. (KPC) is in talks with Indonesia’s Pertamina to build an at least 200,000 barrels-per-day refinery in the Southeast Asian country as it aims to lock in buyers for its future oil supply, KPC’s international marketing head said.
A global supply glut following a gusher of shale oil from the US has redrawn crude trade flows, pushing excess Latin American and West African cargoes to Asia and forcing OPEC members to redraft their strategy to maintain their share of a market that has traditionally been their stronghold.
“At the end of the day we have the strategy for disbursal of our crude. We prefer to go into long-term contracts. When we say long term it is 10 years and above,” KPC’s Nabil M. Bourisly, said.
A stake in the planned refinery will give KPC a stable outlet for its crude for 20-25 years, he added.
Although details on the size and investment for the refinery are yet to be worked out, Bourisly said the plant will at least be of 200,000 (bpd) capacity in order to be an “economical project.”
The talks for a refinery in Indonesia come on the heels of an agreement between KPC and Pertamina to boost cooperation in the energy space.
Indonesia, which is set to rejoin the Organization of the Petroleum Exporting Countries (OPEC) in December after a seven-year break, wants to build complex refineries to meet local fuel demand and cut imports.
The KPC-Pertamina project will however “need at least 5 years” to be commissioned, Bourisly said. KPC is already building a 200,000-bpd refinery and petrochemical project in Vietnam, which will be commissioned in early 2017, he added.
KPC aims to raise its production to 4 million bpd by 2020 from the current 2.95 million bpd and is confident that there will be ample demand for its oil. It exports about 2-2.1 million bpd oil with 80 percent of that going to Asia, Bourisly said.
“Challenges are always there .. We as a supplier have to deal with these challenges regardless of who is in and who is out,” he said, when asked if Iranian exports will hit his firm’s market share.
Iran has cut the quarterly price for its flagship crude to a three-year low to lure Asian buyers and regain market share lost since US and Euro
KPC in talks to build refinery in Indonesia
KPC in talks to build refinery in Indonesia
Saudi Aramco, ExxonMobil, Samref ink deal to study Yanbu refinery upgrade
RIYADH: Energy giants Saudi Aramco, ExxonMobil, and Samref have signed a venture framework agreement to upgrade the Yanbu refinery and expand it into an integrated petrochemical complex.
As a part of the deal, the companies will explore capital investments to upgrade and diversify production, including high-quality distillates that result in lower emissions and high-performance chemicals, according to a joint press statement.
The agreement will also see the parties explore opportunities to improve the refinery’s energy efficiency and reduce environmental impacts from operations through an integrated emissions-reduction strategy.
Samref is an equally owned joint venture between Aramco and Mobil Yanbu Refining Co. Inc., a wholly owned subsidiary of Exxon Mobil Corp.
The refinery currently has the capacity to process more than 400,000 barrels of crude oil per day, producing a diverse range of energy products, including propane, automotive diesel oil, marine heavy fuel oil, and sulfur.
“This next phase of Samref marks a step in our long-term strategic collaboration with ExxonMobil. Designed to increase the conversion of crude oil and petroleum liquids into high-value chemicals, this project reinforces our commitment to advancing Downstream value creation and our liquids-to-chemicals strategy,” said Aramco Downstream President, Mohammed Y. Al Qahtani.
He added that the deal will help position Samref as a key driver of the Kingdom’s petrochemical sector’s growth.
The press statement further said that companies will commence a preliminary front-end engineering and design phase for the proposed project, which would aim to maximize operational advantages, enhance Samref’s competitiveness, and help to meet growing demand for high-quality petrochemical products in Saudi Arabia.
The firms added that these plans are subject to market conditions, regulatory approvals, and final investment decisions by Aramco and ExxonMobil.
“We value our partnership with Aramco and our long history in Saudi Arabia. We look forward to evaluating this project, which aligns with our strategy to focus on investments that allow us to grow high-value products that meet society’s evolving energy needs and contribute to a lower-emission future,” said Jack Williams, senior vice president of Exxon Mobil Corp.
