- 1.5 million t/y Mono-ethylene glycol (MEG) plant using Shell’s proprietary OMEGA (Only MEG Advantaged) technology using two trains of 750,000 t/y capacity each
- 300,000 t/y linear alpha olefins (LAO) using Shell’s proprietary SHOP (Shell Higher Olefin Process)
Image may be NSFW. Clik here to view.Image may be NSFW. Clik here to view.Expected on June 13th, the state-owned oil refiner Kuwait National Petroleum Co (KNPC) has decided to postpone to July 4th the dead line for the engineering companies to submit their expression of interest (EOI) for the calls for tenders to be issued for the multiple engineering, procurement and construction (EPC) contracts requested for the Clean Fuel Project (CFP) and New Refinery Project (NRP) projects.
These projects were on hold since 2008, these three weeks are to complete the bidders list.
Together these projects represent $33 billion capital expenditure, about $18 billion for CFP and $15 billion for NRP.
The CFP and NRP projects are intended to meet the new international standards of clean fuel emissions and to increase gasoline capacities in order to meet the local market demand.
KNPC Clean Fuel Project (CFP)
The CFP project would:
- Involve building at least 30 units at Mina Abdulla and Mina al Ahmadi refineries
- Produce 10 parts per million (ppm) of low sulphur diesel (<1%) and Euro IV gasoline
- Provide additional fuel by-products
Following the CFP upgrade, the refining capacity of:
- Mina al Ahmadi would drop to 346,000 b/d from 466,000 b/d now
- Mina Abdulla would increase to 454,000 b/d from 270,000 b/d
As a result, the refining capacity following the CFP upgrade would come to 800,000 b/d.
Since 2008, 37 reactors and vessels were ordered as long lead items, 30 of them were received by the company during this year as the manufacturing and delivery of such equipment takes along time.
The CFP will be tendered in three packages.
New Refinery Project (NRP)
The 4th refinery or the New Refinery Project(NRP) in Zoor area, is one of the largest strategic projects in the state of Kuwait as its capacity will be around 615,000b/d.
It that sense it will be one the largest refining plants in the Middle East.
Image may be NSFW. Clik here to view.The NRP main objective is to supply power generation plants in Kuwait with environment friendly fuel and provide an alternatives for gas imports and heavy fuel consumption.
It will also be capable of opening new world markets for Kuwait petroleum products.
Once the CFP and NRP are completed the refining capacity available to KNPC will rise to around 1,400.000 b/d from the actual 736,000 b/d.
The CFP and NRP projects complement each other and will lead to the processing of high quality petroleum products that will open new market outlets across the world an enhance their competitive ability at those markets.
Designing and manufacturing of the reactors and separation vessel for the project were ordered as long lead items and manufactured.
In fact 36 reactors and 6 vessels have already been delivered to the company in view of the fact that their manufacturing needs rather a long time.
KNPC has already received approval of the concerned agency to allocate the site in Zoor area for the NRP.
$300 million PMC contract for CFP and NRP
With market needs increasing and the actual refineries aging, Kuwait seems now ready for decision with the preparation work being tendered in May.
Image may be NSFW. Clik here to view.No less than 12 engineering companies had been pre-qualified for this preparation work, all of them will also bid for the CFP and NRP main packages.
In parallel 9 companies including AMEC, Fluor, Technip, JacobsEngineering and WorleyParsons are bidding for the Project Management Consultancy (PMC) contract estimated around $300 million.
As its neighbors, Saudi Aramco and Qatar Petroleum, KNPC is moving from the Upstream centric NOC profile to the integrated Upstream-Downstream business model in order to reduce its reliance on barrels prices fluctuations.
According to the Kuwait News Agency (KUNA), KNPC is planning to complete the CFP and NRP projects by 2018 with an estimated capital expenditure about $33 billion.
With a capacity of 400,000 t/y of polyethylene, this greenfield unit is part of the petrochemical complex developed by Ethydco at Alexandria in the Ameriya District of in the north of Egypt.
The purpose of this Petrochemical Master Plan is to reduce the importations for petrochemicalproducts and support the development of the Egyptian industry to meet the local needs.
Toyo will lead the consortium but the detailed design, the procurement of the equipment will be shared with ENPPI.
In parallel ENPPI has been awarded the project management of the Alexandria polyethylene project.
In order to maximize the local added of the project, Toyo and ENPPI will subcontract the project construction and commissioning to the local Petrojet.
With this $400 million contract, Toyo signs it sixth project won from Ethydco since created.
Scheduled to start commercial operation in 2015, the EthydcoAlexandria polyethylene project should take 28 months for execution, giving the opportunity to Toyo to consolidate its market leadership in the Egypt petrochemical industry.
Image may be NSFW. Clik here to view.Located 84 kilometers northwest offshore Abu Dhabi and 56 kilometers from the export terminal on Zirku Island, Upper Zakum is the second largest crude oil field in the Gulf and the fourth one in the world.
In the same offshore area ly the fields of Umm al-Dalkh and Satah.
Originally developed by the Umm al-Dalkh Development Company (UDECO), ADNOC decided in 1988 to merge this company with ZADCO to unitize the development process and the means of production.
Tebodin completed the FEED on Umm al-Dalkh EOR
Umm al-Dalkh is covering 168 square kilometers only 25 kilometers distance from Abu Dhabi shore.
Lying by 2,310 meters, the Umm al-Dalkh field is composed of two reservoirs.
Image may be NSFW. Clik here to view.Discovered in 1969, Umm al-Dalkh has been developed in connection with Upper Zakum, 66 kilometers further north on the way to the export terminal based on the Zirku Island.
Currently, the crude oil extracted from Umm al-Dalkh is transported to Upper Zakumthrough a 14-inch pipeline where both fields production is carried out to Zirku Island by a 42-inch pipeline.
In 2010, the Dutch engineering company Tebodin won a first contract to enhance the production of Umm al-Dalkh.
With this last project, ZADCO is targeting to increase capacity from the current 13,000 B:d to 20,000 b/d.
Tebodin completed the FEEDso that ZADCO is now preparing the invitation to bid for the engineering, procurement and construction (EPC) contract.
ZADCO is expecting to receive the technical and commercial offers on the third quarter 2013 in order to make the final investment decision (FID) and award the EPC contract before the end of the year.
Saudi Aramco to develop Jizan Port and Power plant
Image may be NSFW. Clik here to view.In order to ensure the development of the $7 billion Jizan refinery in the south of Saudi Arabia and its commercial operations expected to start in 2016, the Kingdom of Saudi Arabia has decided to concentrate in the hands of the national oil company, Saudi Aramco, the development of the essential infrastructures for the refinery operations such as the Port and the Power plant.
Because of its remote location from the crude oil producing areas, the Jizan refinery will need to be supplied in feedstock by tankers while the refined hydrocarbon products will be also exported by vessel to the global market.
Thus, the Port of Jizan must be developedon time to supply the 400,000 barrels per day (b/d) refinery.
Image may be NSFW. Clik here to view.In the same way, this refinery will require 500 MW of electrical power that shall be connected and switched on before the refinery starts its operation.
Overall the Jizan Power Plant should have a capacity of 2,400 MW in order to supply the whole Jizan Economic City (JEC) project.
In addition, Saudi Aramco decided to combine the electrical power generation together with the crude oil gasification process that should provide feeders for the refinery.
Beyond the electrical power supply, the processes of the refinery and the power plant are closely connected through the gasification process.
Therefore, Saudi Aramco must develop the Port, the Power plant and the refinery in Jizan as one project with several units.
- Air Separation with hydrogen and oxygen production units
- Sulfur recovery
- Offsites and utilities
Among these packages, the most sensitive is the gasification plant as to condition the operations and performances of the combined cycle power plant and the refinery.
For this gasification plant, Saudi Aramco selected the Shell Integrated Gasification Combined Cycle (IGCC) technology.
This process combines hydrogen with crude oil, including heavy crude oil, to produce synthesis gas (syngas).
This syngas will then be fired in the combined cycle power plant as usual gas.
For this Jizan Gasification Plant, Saudi Aramcopre-qualified and have invited to bid (ITB)nine teams of companies:
In this competition the preference will be given to the companies having an experience in the gasification process and being able to meetSaudi Aramcorequirements in term of local content.
In practice it means that some of the current standalone bidders will likely form consortium together to meet these expectations.
Regarding the air separation unit, Saudi Aramco made the decision to award it on build-own-and-operate contract basis.
Then for the sulfur recovery unit, Saudi Aramco transferred it from the refinery package to the power plant package as the performances of the desulfurization unit will be directly related to the gasification process.
With this new alignment of the most important projects of the Jizan Economic City (JEC), Saudi Aramco expect the start the Jizan Refinery Project, the Jizan IGCC and the Port of Jizan all together in the same time in 2016.
Originally the Carioca FPSO was due to be one of the eight replicate FPSOs currently under construction at Estaleiro Rio Grande shipyard owned by the Brazilian engineering companyEngevix’s offshore branch Ecovix.
In this joint venture,Repsol-Sinopec Brazil results from an alliance signed in October 2010 where both companiesRepsol from Spain and Sinopec from China agreed to cooperate in exploration and production projects offshore Brazil.
Carioca was discovered in 2007 in the BM-S-9 concession, 273 kilometers south Rio de Janeiro and 275 kilometers east of San Paulo, by 2,140 meters of water depth.
The first exploratory wellsappeared immediately prolific as the flow rates were exceeding the capacity of the testing equipment.
The following appraisal wells performed in 2011 and 2012, especially the Carioca Norte, confirmed the significant presence of light crude oil and raw natural gas making Carioca one of the largest discovery in the pre-salt area.
Lying by 5,576 meters of total depth, the appraisal campaign unveiled also a significant percentage of carbon dioxide with some uncertainty still about the exact amount of this carbon dioxide.
Then, and in similar way to the other pre-salt crude oil fields, Carioca contains raw natural gas in such quantity that it cannot be flared.
Petrobras to re-inject gas and carbon dioxide in Carioca
The monetization of this gas at such long distance from the shore and in ultra deep water remains a challenge for Petrobras due to the costs of the requested export pipeline.
In a first phasePetrobras, BG and Repsolwill use the gas to power the FPSOand the gasleft, including the carbone dioxide, will be simply re-injected in the reservoir.
In a second phase, when the natural gas will have run out,Petrobras is planning to import thisnatural gasfrom another FPSO such a Sapinhoa, the closest field, or Lula that should have the higher capacity for export, in order to continue to power the Carioca FPSO and to inject the left part of the gas.
In this context where there is still some uncertainty about the optimized process to operate Cariocabecause of the carbon dioxide content rate and because of the required flexibility to handle the associated gas, Petrobras and its partners have preferred to begin operations in Carioca with a leased FPSOinstead of the original wholly owned vessel.
For the same reasons, this CariocaFPSO should have a smaller size as it should be designed to produce:
- 100,000 barrels per day (b/d) of crude oil
- 5 million cubic meters per day (cm/d) of natural gas
By comparison, the eight replicate FPSOs would have a capacity of 150,000 b/d of crude oil.
Petrobras is planning to issue the call for tender in May in expecting the quotations from the engineering companies in June for the lease contract.
Among the bidders, Petrobras and its partners qualified:
In order to avoid any further slippage in the projects execution, Petrobras is encouraging the Brazilian shipyards to team up with the foreign engineering companies.
These alliances should reduce the number of bidders.
Despite all the pending questions about the exact nature of the reservoir, Petrobras and its partners, BG and Repsol-Sinopec Brazil are targeting the final investment decision (FID) at the end of 2013 for commercial operations to start in second half 2016.
Tullowtook first interests in Uganda in 2004 and performed the Kingfisher-1 discovery in the Block-3A in 2006.
Then Tullow acquired 100% interests of the Block-2 in 2007 and of the Block-1 in 2010.
Along this period of exploration, the estimation of the recoverable reserves were continuously revised upward to actually exceed 2 billion barrels of oil equivalent (boe) concentrating approximately 60% of all the Uganda reserves.
The development of these Blocks in the Albertine Rift Basin may require more than $15 billion capital expenditure on the top of which should be added all the costs of infrastructures to export and/or transport the oil and gas from this far remote area.
In this context, Tullow offered in 2011 to share interests with Total and CNOOC through a Sales and Purchase Agreement (SPA) that should leave each partner with 33% ownership of each blocks.
In 2012, the Uganda Government approved the farm-out agreement between Tullow and its partners where:
Image may be NSFW. Clik here to view.
- Totalholds 33% of the Block-1 and is the operator in partnership with Tullow and CNOOC
- Tullow owns 33% of the Block-2 and is the operator in partnership with Total and CNOOC
- CNOOC takes 33% of the Block-3A, renamed Kingfisher, and is the operator in partnership with Total and Tullow
In respect with the size and reserves of the three blocks the development capital expenditure of the three blocks should be split:
- Block-1 $7 billion
- Block-2 $4 billion
- Block-3A $4 billion
Among these fields, Kingfisher (Block-3A) should be the first block to be developed under the lead of CNOOC.
In respect with Kingfisher estimated reserves of 800 million boe, Petrofac could develop a comprehensivepre-FEED so that the FEEDcontract should cover:
In a first phase, this central processing facility should have a capacity of 20,000 barrels per day (b/d) that should be expanded to 40,000 b/d in a second phase.
In this first phase the crude oil will be exported through 85 kilometers pipeline to a greenfield refinery to be located in Hoima.
This refinery is subject to intensive discussions between Tullow, Total, CNOOC and Uganda Government as the companies would like to size it just to meet the domestic market while the Government aims at favoring the transformation in Uganda to export higher added value with refined products.
For instance they compromised on a 30,000 b/d capacity that should be expanded in the future to 60,000 b/d in respect with the domestic market demand.
In parallel, Tullow, Total and CNOOC are working on different alternatives of export pipelines:
- 250 kilometers to Jinja
- To Tanzania coast in turning around the Great Lakes
- To Mombasa or Lamu on the Kenya coast
With the FEEDcontract to be awarded soon, CNOOC and its partners Tullow and Total expect Kingfisher (Block-3A) and the Hoima refinery to start commercial operations in 2017.
With an estimated $20 billion capital expenditure, the RAPID project is the largest ever Petronas project downstream.
Image may be NSFW. Clik here to view.This RAPID project is strategic for Malaysia as it will increase the local added value from the production of hydrocarbons and it will reduce the import of corresponding petrochemical products to supply its transformation industry.
This RAPID Refinery and integrated petrochemical complex should include 28 major production units in beginning with 300,000 b/d refinery.
To be located in Pengerang, Johor, in front of Singapore, this refinery should produce:
After signing these technology agreements with CB&I, Evonik, Itochu, Jacobs and Versalis, Petronas is moving toward the engineering, procurement, construction and commissioning (EPCC) contracts.
Regarding the RAPID Package 8, the EPCC contract should include the:
- Cumene unit
- Phenol unit
- Bis-Phenol-A (BPA) unit
This cumene unit is to produce phenolfrom benzene and propylene.
This phenol is one of the most common building blocks of the petrochemicalindustry for polyamides – nylons, polycarbonates and phenolic resins.
In parallel to the Rapid Refinery and Petrochemicalcomplex, Petronasis planning in Pengerang a:
Petronas awarded the EPCC contract for the Pengerang LNG Terminal project to the local Dialog Group.
Regarding the gas-fired power plant, the consortium made of Alstom from France, Sumitomo from Japan and the local Mudajaya Group were pre-qualified and submitted on offer.
From engineering and licenses perspective, the Petronas RAPID integrated Refinery and Petrochemicalcomplex is progressing according to plans with a start up planned in 2016.
While Petronas is planning to take the final investment decision (FID) in March 2014, the RAPID Petrochemical Complex may face one year delay to 2017 because of the local infrastructurestaking more time than expected to be accommodated to receive such large project.
In respect with the QPcascade of shares across IQ and QAPCO, QP and its partners share the working interests in the Ras Laffan Petrochemicals complex, in such a way:
In February 2012, when QP and QAPCO signed a Heads of Agreement (HOA), they estimated the Ras Laffan Petrochemical complex to require $5.5 billion capital expenditure.
Since the feasibility studywas completed, the project to be erected at the Ras Laffan Industrial City in the north of Qatar, is getting closer to $7.4 billion capital expenditure.
This Ras Laffan Petrochemical project is part of Qatar strategy to diversify its activities beyond the export of natural gas and especially the liquefied natural gas (LNG) since the USA changed the game of the gas global market with the glut of the shale gas.
To support this strategy to expand its downstream sector, QP is engaged withShell in a $6.4 billion Ras Laffan Olefins Projects renamed recentlyShell Al-Karaana project.
Overall Qatar is planning to invest $25 billion capital expenditure in the petrochemical sectorbetween 2013 and 2020.
QP and QAPCO to award Ras Laffan FEED in 2013
Designed to produce more than 3 million tonnes per year (t/y) with several packages to be placed for bid, QP and QAPCOawarded Bechtel the contract to provide supportingproject management consultancy (PMC).
In addition Bechtel will help QP and QAPCO to select the technology licenses for the different production units:
To optimize operations with the maximum flexibilityQP and QAPCO have opted during the conceptual study for a mixed cracker that will be able to useethane or butane as feedstock.
With a production in 2011 of 65,000 barrels per day (b/d) of crude oil and natural gas liquids (NGL) and 867 million cubic feet per day (cf/d) of natural gas, Chevron is the largest operating company in Thailand.
Since Chevron and PTTEP have managed to start the first shipments from the previous projects Platong 2 and Greater Bongkok South in the Pailin Basin , they decided to implement the full field development of their license area with the Ubon project located in the Block 12/27 of the Contract 4.
Finally Chevron and its partners PTTEP, Hess and Mitsuipreferred the association of the central processing platform with the FSO to develop Ubon and pre-qualify contractors.
This Ubon central processing platform should have a capacity of 115 million cf/d of natural gas and should be able to host 140 people in its living quarter.
The topsides for Ubon are estimated to weight 6,000 tonnes, for a total weight of the platform of 20,000 tonnes.
On this base, the pre-qualification process for the Ubon central processing platform has been pretty large as it enlisted:
Chevron and its partners PTTEP, Hess and Mitsui are planning to award theFEEDcontract for Ubon on third quarter 2013 in order to put the central processing platform and the FSO to come on stream offshore Thailand in 2017.
Image may be NSFW. Clik here to view.In 2012, Brazil and its flagship, Petróleo Brasileiro S.A. (Petrobras), had to face a reality regarding their capacity to deliver on time all the fleets of drilling ships, exploration and production floating units and services vessels in respect with the local content requirements.
Awarding contracts to shipyardsnot yet even built had started to rise questions since the accumulation of delays is directly affecting the oil and gas production and Petrobras balance sheet.
Image may be NSFW. Clik here to view.In this context, Brazil had to find solutions to speed up the delivery of the infrastructures required to develop its upstream sectorwithout breaching its local content strategy.
To support this new leasing strategy, Petrobras is building partnership with the most important key players, such asSBM Offshore (SBM), Modec or BW Offshore.
In addition the Governmentopened the door to foreign investors in organizing the 11th round of licenses on new blocks offshore the northern coastline of Brazil.
All these initiatives illustrate major changes in the Brazilian policy in giving the priority to the delivery on time of the exploration and production units and in accepting the idea that Petrobrascannot remain as the only actor of the Brazilian oil and gas developmentdespite all its competences and resources,opening space for other players ready to go.
Petrobras to lease FPSOs to secure 2017 oil targets
Image may be NSFW. Clik here to view.Within the Asia-Pacific region, Indonesiapopped up on the first half 2013 as one of the most dynamic country with the major international oil companies (IOCs)BP, Chevron, Eni, GDF-Suez, Inpex, PTTEP, Shell and Totalcompeting to speed up their projects in exploration and production.
With offshore basins rich in natural gas, Indonesia intends to take advantage of the costs challenges in Australia to attract foreign investors.
The projects may be related to new discoveries as well as the expansion and revival of existing maturing oil and gas fields in drilling new wells and in deploying all the technics of the enhanced oil recovery (EOR).
In the light of the experiences made by some companies such as Chevron on the first half of 2013, the success of the development of the oil and gas sector in Indonesiaon the coming years will mostly depend on the stability of the local regulation, especially regarding the protection of the environment.
BP selects bidders for Tangghu LNG FEED competition
Image may be NSFW. Clik here to view.The International Oil Company (IOC) BP and its partners in the Tangguh Expansion Project are currently qualifying the engineering companies to be invited to bid (ITB)on the onshore Tangguh third LNG Train and the production platforms to be installed offshore the Irian Jaya District of the West Papua Province of Indonesia.
Image may be NSFW. Clik here to view.On October 20th, 2012, the Director of the Oil and Gas at the Indonesian Ministry of Energy and Mineral resources confirmed that the Thai national oil company, PTTEP, has been selected to replace the leaving Malaysian Petronasfrom the partnership.
With the third largest reserves of oil and gas in Asia after China and India, Malaysia realized in 2010 that it could become a net importer in the near futureif new investments were not made in exploration and production to compensate the natural depletion of the existing fields.
Image may be NSFW. Clik here to view.Malaysia offshore reserves are estimated to 10 billion of barrels oil equivalent (boe) from which only 3 billion boe are commercially identified.
In this context, the Malaysian Governmentpublished in 2010 the Economic Transformation Program (ETP) to list and promote the development of more than 105 marginal fields.
In 2011, the government improved its offer in reducing the taxes from 38% to 25% to the foreign companies investing in these marginal fields.
As a first result, the oil and gas production increased in Malaysia by 3% on first quarter 2013 over the same period last year to 1.69 million boe/d.
As many of these marginal fields contain higher sulfide and carbon dioxide, Petronas is encouraging the foreign companies to introduce new technologies and proposed them to share the risks in investing in these fieldsthrough the Risk Security Contracts scheme.
In parallel to its intensive upstream activities, Malaysia is also pushing forward the midstream sector with liquefied natural gas (LNG) import and regasification terminal projects and the $20 billion Refinery And Petrochemicals Integrated Development (RAPID) project.
In supporting multi-billion capital expenditure in the downstream sector, Malaysia intend to reduce its petrochemical balance on import petrochemical products and to create thousands jobs since each $billion investeddownstreamopens three times more employment opportunities than in the upstream sector.
In this spirit, Malaysia is now pushing hard to increase the local content of all the greenfield projects.
Murphy and Petronas to increase size of Block H FLNG
Around the Malaysian peninsula, Petronas identified 106 marginal oil fields representing more than 580 million barrels of crude oil that it cannot ignore any longer.
In February 2013, the Indonesian regulator SKK Migas approved the program of development (POD)submitted byExxonMobil and Pertamina to move in production the gas and condensate reserves of the Tiung Biru and Jambaran fields.
Despite these differences, the positions of the fields and the nature of the reservoirs, motivatedExxonMobil and Pertamina to unitize the Tiung Biru and Jambaran gas fields in order to optimize the project development and operations.
By this unitization agreement, Pertamina took the operator role for the project reaching now the FEED stage.
Pertamina and ExxonMobil to invest $3.3 billion in Cepu
According to the POD submitted to SKK Migas, representing the Indonesian Authorities, Pertamina and ExxonMobilare planning to spend $3.3 billion to develop the Tiung Biru and Jambaran gas fields.
Image may be NSFW. Clik here to view.This investment will be split between:
- $1.4 billion in capital expenditure
- $1.9 billion in operations expenditure
These amounts are justified by the size of the reserves.
Holding 600 million barrels of crude oil, the Cepu Block is well known by the Banyu Urip major discoverycontributing alone for 250 million barrels.
Beside these crude oil reserves, Jambaran concentrates the natural gasreserves in the Cepu Block.
Together with Tiung Biru standing just outside the Cepu Block, the unitized fields represent recoverable reserves of:
The gas should be exported through an existing pipelineoperated by the state-owned Petrokimia Gresik company to buy the gas and supply fertilizer plants in East Java.
While the first production has been defined around 185 million cubic feet per day (cf/d), Pertamina and ExxonMobil are expecting further discoveries, so that the Cepu gascentral processing facilityshould have a capacity from start of:
- 300 to 350 million cubic feet per day (cf/d) of gas
Image may be NSFW. Clik here to view.In a context of unrest in some North Africa and Middle-East countries, Oman is keen to ensure a sustainable economical development across all the country and especially in the regions with the less industries.
Located in the Al-Wusta Governorate on the west coast of the Sultanate along the Gulf of Oman, Duqm is so far living from a local fishing activity.
In selecting this small city to build a $6 billion capital expenditure refinery and petrochemical complex, Oman expects to balance its development between the north and the south in taking benefit on the lengthy treat on the Strait of Hormuz to export crude oil from the Gulf countries.
The Duqm Refinery project starts with accommodating a special economical zone (SEZ).
The refinery should have a capacity of 230,000 barrels per day (b/d) of crude oil.
This crude oil should be imported from the neighboring countries.
Only five bidders for Duqm Refinery FEED contract
The purpose is to produce refined products for the domestic market or export and to provide naphtha as feedstock for the petrochemical complex, to be added in a second phase.
Because of its intense trading activities to import crude oil and export refined products or even petrochemical products in the future, the Duqm refinery will be equipped with storage capacities among the largest in the world.
Out of these eight companies, five returned a tender.
The technical bids were submitted on the first half on the year while the commercial bids were following in August.
Since then this FEED contract for the Duqm Refinery should have been awarded, but the compatibility of these technical offers with the potential licenses to be selected in parallel is taking more time than expected.
With this FEED contract to be sanctioned on early 2014 to one of the bidders, Oman Oil and IPIC must admit that the Duqm Refinery project should start commercial operations in 2018 at the earliest instead of 2017 as previously planned.
This pre-qualification process of the engineering companies had been initiated in November 2012 with a submission date on January 2013.
Image may be NSFW. Clik here to view.This short period of time left to potential bidders had left impression that Mina Al-Ahmadi Fifth Train project could move on fast track regardless the challenges of $35 billion capital expenditure to be engaged separately by KNPC through its giant Clean Fuel Project (CFP)and New Refinery Project (NRP).
But the new rules implemented by Kuwait Central Tenders Committee (CTC) affected all the projects regarding the tendering process lead time in perspective to improve clarity and facilitate projects sanctions to come into execution in following.
Located 45 kilometers south of Kuwait City along the Arabic Gulf, the Mina Al-Ahmadi (MAA) refinery started operations in 1949 with only 25,000 barrels per day (b/d) capacity.
Since then , KNPC took it over in 1980 and, as part of its mission to develop Kuwait capacities for the refining of crude oil and liquefaction of associated gases, KNPC proceeded to several expansions.
The next expansion of the Mina Al-Ahmadi refinery is now one of the major package of the $16 billion capital expenditure Clean Fuels Project.
In parallel to this CFP project to increase the refining capacities of crude oil, KNPC is also planning to add new gas processing facilities with the Mina Al-Ahmadi Fifth Train project.
KNPC selected eight bidders to build MAA Fifth Train
With a total capacity of 1,680 million cubic feet per day (cf/d) these trains extract the propane, butane and gasoline from the sweet gas and condensateassociated to the crude oil production.
After building a fourth train, KNPC is now planning to add a fifth train.
KNPC and Amec pre-qualified eight engineering companies that should be invited to bid in 2014 in expecting the Mina Al-Ahmadi Fifth Train project to come on stream in 2017.
Image may be NSFW. Clik here to view.As Abu Dhabi sovereign fund, IPIC is recycling oil and gas $ revenues into world-scale projects, preferably providing growth and stability to the Gulf Co-operation Council (GCC) region.
In that respect the Duqm Refinery and integrated petrochemical complex is a perfect target proposed by Oman Oil as it will contribute to Sultanate economical growth in the Al-Wusta Governorate, a region strategically located on the Gulf of Oman to save traffic across the sensitive Strait of Ormuz.
From its central position, Duqm will facilitate the export and import of hydrocarbon products in a region still underdeveloped compared with the north of the country.
The DRPIC joint venture was established in June 2012 by Oman Oil of IPIC.
The Duqm Refinery and Petrochemical integrated complex project should be located in the dedicated Duqm Special Economic Zone (SEZ) on the Al-Wusta Governorate coast.
The crude oil to feed the Duqm refinery should be imported from the GCC countries.
Then the refined transportation fuels and the hydrocarbon products issued from the petrochemical complex should be partly consumed by Oman domestic market and partly exported, thus propelling Duqm as a major trading and storage hub in the Middle-East region.
Because of its size, Oman Oil and IPIC has decided to build it up in two phases.
In a first phase, Oman Oil and IPIC will spend $6 billion capital expenditure to build the refinery.
In a second phase, the integrated petrochemical complex should require $9 billion investment.
Designed around 230,000 barrels per day (b/d) capacity the Duqm full conversion refinery should include a:
In the meantime Oman Oil and IPIC are proceeding to the pre-qualification of the engineering companies for this first phase.
Considering the qualified contractors to submit their tenders on second half 2015, Oman Oil and IPIC should award the EPC contracts on mid-2016 in order to start Duqm Refinery commercial operations by 2019.
Image may be NSFW. Clik here to view.For Indonesia this agreement is critical as it will help to convert $10 billion transportation fuel into gas for the high speed diesel engines in trains, trucks and ships.
In addition it will produce the equivalent of $9 billion electricity revenues.
Valid until 2033, this agreement represents for BP and its partners 40% of the capacity of the third LNG train planned in Tangguh designed for a capacity of 3.8 million t/y of LNG.
BP had submitted this Tangguh Expansion Project to Indonesia Authorities as early as August 2012, but offshore gas production had to be built up to supply this Tangguh Train-3 and an agreement had to be found on the gas price.
BP Tangguh LNG Train-3 in competitive FEED
Expecting to execute the Tangguh Expansion Project on fast-track as soon as an agreement could signed, BP and its partners had decided from start to organize a competitive front end engineering and design (FEED).
Image may be NSFW. Clik here to view.But in this scenario, the teams in competition had to include local contractors associated with international engineering companies in order to guaranty the local Authorities the required local content.
In June 2013, BP and its partners qualified three consortia which could meet the minimum requirements to be invited to bid (ITB) for the competitive FEED of this onshore part of the Tangguh Expansion Project.
The selected joint ventures of engineering companies and local contractors are expected to submit their basic design and recommendations for the EPC phase by end of 2014 in order to make the final investment decision (FID) and start the first shipment by 2018.
This decision was a major step change in Oman strategy with an economy so far depending on oil and gas exploration, production and exportation.
Benchmarking Saudi Arabia, the Sultanate of Oman decided to reduce its reliance on oil and gas exportation in developing a petrochemical industry.
Since the signature of the Oman Oil and LG joint venture in 2012, the first invitation to bid (ITB) were expected in 2013 but the project was moving slowly because of the lack of feedstock, leading to postpone the qualification process and the EPC contracts tendering.
With major upstream projects moving ahead, Oman Oil is now getting confident to built enough oil and gas production capacity to feed its Sohar petrochemical complex.
WorleyParsons won Sohar PTA – PET PMC contract
Established in 2006 as the Oman Oildownstream arm, Takamul has been involved in Sohar Petrochemical complex project so that the working interests in OIPIC are actually distributed:
In Sohar Petrochemical complex, Takamul and its partners prioritized the production of basic polymers in order to supply the domestic market with the fundamental materials to support the daily consumption in the Sultanate, such as plastic bottles, packaging, home plastic goods, polyester.
Although the PIA is to be combined with the PTA to produce PET, this unit is very specific, thus is being developed separately from the PTA and PET units.
– 1.5 million t/y Mono-ethylene glycol (MEG) plant using Shell’s proprietary OMEGA (Only MEG Advantaged) technology using two trains of 750,000 t/y capacity each
– 300,000 t/y linear alpha olefins (LAO) using Shell’s proprietary SHOP (Shell Higher Olefin Process)
In 2011, Qatar Petroleum and Shell signed a Heads of Agreement for the Development of a World-scale petrochemicals Complex in in Ras Laffan Industrial City, Qatar
- 1.1 million t/y of ethylene
The complex will produce cost-competitive petrochemicals products to be marketed primarily into Asian growth markets.
