74MAY 2015 | HydrocarbonProcessing.com
Regional Report
Shell is developing the huge Majnoon oil field near Basra that is pumping approximately 200 Mbpd. Shell also signed a $17.2-B deal last year to collect natural gas from Iraq’s southern oil field production. The gas has traditionally been flared, and Iraq has long had ambitions to collect and use the gas to meet domestic energy demand.
Qatar. While several large projects have been canceled recently, Qatar is still investing in its refining and petrochemical sectors.
Qatar Petroleum has entered into a JV agreement with Total, Idemitsu, Cosmo, Marubeni and Mitsui, to build Laffan Refin- ery 2 (LR2), a $1.5-B condensate refinery in Ras Laffan Indus- trial City (FIG. 4). Qatar Petroleum will hold an 84% interest in the project, while Total will hold 10%, Idemitsu and Cosmo will each hold 2%, and Marubeni and Mitsui will each own 1%. The plant will be operated by Qatargas Operating Co. and de- veloped similarly to Laffan Refinery 1(LR1). The LR2 facility will process untreated condensate produced from the country’s North field, and it will have a processing capacity of 146 Mbpd and a daily production capacity of 60 Mbpd of naphtha, 53 Mbpd of jet fuel, 24 Mbpd of GO and 9 Mbpd of liquid petro- leum gas. Additionally, LR2 will include a diesel hydrotreater unit that will be able to process all light GO from LR1 and LR2. A Chiyoda and CTCI JV has been contracted for the engineer- ing, procurement, supply, construction and commissioning (EPSCC). The project is expected to be commissioned in 2016.
United Arab Emirates. The Abu Dhabi National Oil Com- pany (ADNOC) will expand its existing Ruwais refinery (400 Mbpd) with an adjoining 417-Mbpd capacity refinery.4 The complex produces LPG, premium unleaded gasoline (98 oc- tane) and special unleaded gasoline (95 octane), as well as naph- tha, Jet-A1, kerosine, GO and granulated S. The latest expansion comes on the heels of ADNOC’s other capital intensive projects in Ruwais—such as the Borouge expansion projects (Borouge 2 and 3) as shown in FIG. 5—and will include the addition of crude FIG. 4. A Qatar Petroleum-led JV is constructing Laffan Refinery 2
(LR2), a $1.5-B refinery that will process untreated condensate produced from Qatar’s North field.
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Regional Report
distillation and sulfur recovery units, a residue fluidized catalytic cracker (RFCC) and a carbon black delayed coker (CBDC) unit, which will have a production capacity of 40 Mtpy of carbon black and 30 Mbpd of crude. It will consist of two trains with a de- signed processing capacity of 700 Mt of anode green petroleum coke. The $10-B project is expected to be completed in 2015.
Iran. Despite being hampered by economic sanctions, approxi- mately 360 Mbpd of new condensate splitting capacity is expect- ed to come onstream in three phases, starting at the end of 2015 or early 2016. This project is likely to transform the country from a gasoline importer to an exporter.2 A signed 2013 agree- ment to begin exporting natural gas to neighboring Iraq has been delayed due to security concerns and fighting between Islamic State militants and Iraqi troops.
Completion of the pipeline would initially allow delivery of 4 MMcmd of gas to feed three power plants in Baghdad and Di- yala. That volume could rise to 35 MMcmd. Iran has huge gas re- serves and exports small quantities to Turkey, but it has been un- able to increase production fast enough to meet its own demand. Northern Iran relies heavily on gas imports from Turkmenistan, especially for winter heating.
Oman. As part of a program to reduce its reliance on the export of crude oil and natural gas in developing its downstream industry, Oman Oil Refineries and Petroleum Co. (Orpic) plans to con- struct a greenfield petrochemical complex near the Sohar refinery.
The Liwa Plastics project is being built to enhance both fuel and plastics production in Oman, and it includes the construction of a gas extraction plant in Fahud. Total costs for the complex, extrac- tion plant, infrastructure and other facilities could top $5 B. Plas- tics production will increase from 200 Mtpy to 1.4 MMtpy from 2013–2018, while fuels production will grow from 7.3 MMtpy to 11.3 MMtpy from 2013–2018.4 The project will be constructed in tandem with the Sohar refinery expansion and upgrade project.
Global engineering firms are eyeing the mega-refinery scheme at the Duqm Refinery and Petrochemical Integrated
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FIG. 5. ADNOC is expanding its existing Ruwais refinery following previous projects at Borouge 2 and 3.
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Complex on Oman’s Al-Wusta coast. Duqm Refinery and Pet- rochemical Industries Co. LLC (DRPIC), an equal JV of Oman Oil Co. (OOC) and International Petroleum Investment Co. (IPIC), respectively the energy investment arms of the Sul- tanate of Oman and the UAE Emirate of Abu Dhabi, is jointly developing the refinery project with an investment of approxi- mately $6 B. Plans for an associated petrochemical complex in the second phase could add a further $9 B to the total project cost. One of the project’s main goals is to facilitate the export and import of hydrocarbon products in a region still underde- veloped compared with the north of the country. The project
also holds strategic importance, as imports and exports will not have to travel through the Strait of Hormuz.
Turkey. The planned Socar Turkey Aegean Refinery (STAR) will be integrated at the Petkim petrochemicals site on the Ae- gean coast. It will process medium-sour crudes (Azeri light, Kerkuk and Urals oil) into low-S transportation fuels, meeting Euro 5 specs. The products will be mainly sold to the domestic market and will provide feedstock for the Petkim Petrochemical complex, part of Socar’s downstream activities and its most im- portant production unit outside Azerbaijan. The $5-B project,
which is expected to be commissioned in 2018, is a JV between Azerbaijan state oil firm SOCAR and Turkey Enerji AS.
Bahrain. The $5-B expansion of Bahrain Petroleum Co.’s (BAPCO’s) Sitra refinery will increase processing capacity by 35% to 360 Mbpd.4 The project includes a $360-MM expansion, from 120 Mbpd– 350 Mbpd, of a pipeline that supplies the refinery with light crude from Saudi Ara- bia. The refinery imports approximately 85% of its crude oil from Saudi Arabia and is connected by a 54-km pipeline for pumping the feedstock. BAPCO sells 8% of the refinery production to the domestic market and exports the remaining 92% to India, the ME, the Far East and to Africa.
National Oil & Gas Authority (NOGA) is planning to install an LNG floating stor- age unit (FSU) that will have an initial ca- pacity of 400 MMcfd and be expandable to 800 MMcfd. The project will consist of a floating storage unit connected to a regasification unit on an island jetty. The $600-MM terminal will combat the trend of domestic demand outpacing supplies.
Looking forward. The ME is witness- ing a unique combination of consistently high local demand growth, secure feed- stock supplies, dominant NOC investors and a shift from crude oil to refined prod- uct exports. These trends suggest that the ME will remain detached from the economic woes overshadowing the inter- national refining business for the foresee- able future.
LITERATURE CITED
1 Organization of the Petroleum Exporting Countries,
“Monthly Oil Market Report,” March 2015.
2 Nichols., L. and S. Romanow, Hydrocarbon Processing’s
HPI Market Data 2015, “Global Construction and
Investment” and “Refining.”
3 US EIA, “Saudi Arabia Analysis Brief,” September
10, 2014.
4 Hydrocarbon Processing’s Construction Boxscore
Database, April 2015.
5 US EIA, “Kuwait Analysis Brief,” October 24, 2014.
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