A NUMBER of projects are now in development in Kuwait's downstream sector.

KPC subsidiary Kuwait National Petroleum Company (KNPC) is looking to upgrade and modernise existing facilities and add additional units to its three oil refineries at Mina Al Ahmadi, Mina Abdullah and Shuaiba.

As part of the programme, KNPC is looking to replace some existing crude distillation units and install continuous catalytic reformer units.

At the 200,000 barrels per day (bpd) Shuaiba plant, two projects worth $69 million have been approved for a new tail gas treating unit and an upgrade of the refinery's two sulphur units.

Kuwait is moving to increase overall sulphur exports, and the new project at Shuaiba is expected to increase sulphur output by 500 tonnes per day (tpd) from the refinery's units, which are currently producing 600 and 400 tpd respectively.

The Shuaiba project is expected to be awarded by the middle of this year, with completion slated for 2004.

At Mina Al Ahmadi refinery, a new 70,000 bpd gas oil desulphuriser unit is expected to come onstream this year. The unit will, according to reports, boost the refinery's ability to produce low sulphur material and expand its market share.

Gas oil with sulphur content as low as 0.005 per cent will be possible, providing KPC with the flexibility to export new gas oil grades with low sulphur content.

Kuwait's gas oil sales are currently limited to 0.5 per cent and 1.0 per cent sulphur material. The 1.0 per cent sulphur gas oil goes mainly to Pakistan.

After the start-up of the desulphuriser, Kuwait plans to halt exports of 1.0 per cent sulphur gas oil, selling only 0.5 per cent sulphur material, and one or two other low sulphur grades.

Producing 0.005 per cent sulphur gas oil means KPC can blend to bring down the sulphur content of its existing gas oil, so cargoes can go to more varied markets.

Thus, it could export 0.05 per cent sulphur gas oil, which can then go to some countries in Europe, or sell 0.3 per cent sulphur material, which can move to South America.

The bulk of Kuwait's gas oil exports currently move to Asia, where 0.5 per cent sulphur gas oil is still largely used. Most countries in northwest Europe require low sulphur material.

Also at Mina Al Ahmadi refinery, the first phase of a new $400 million pier is due to be finished by September next year. South Korea's Hyundai had been awarded the contract to replace the 40-year old pier in September 2000.

KNPC is also said to be planning to increase the storage capacity and related facilities at the three plants.

A contract will include a detailed study into the existing offshore storage facilities; identification of bottlenecks; suggestions on ways to increase storage capacity and to modify existing capacity and a survey of hydraulic systems and changes to export facilities.

Kuwait is actively looking at ways of increasing its refining capacity to between 1.2 million and 1.5 million bpd by 2004/2005 from a total capacity of about 950,000 bpd at present.

Under the plan, facilities will be upgraded and modernised in a first phase plan, while some reports suggest that a second phase of development will see a new refinery being built by KNPC.

In the petrochemical sector, Kuwait's Petrochemical Industries Company (PIC) is developing a new aromatics complex at Shuaiba.

The facility, which will cost an estimated $1.4 billion, will have a capacity of 650,000 tonnes per year (tpy) of benzene and paraxylene and 500,000 tpy of styrene monomer, according to reports.

Naphtha from the KNPC refineries at Mina Al Ahmadi, Mina Abdullah and Shuaiba will be used as feedstock for the project, which is due to be commissioned by 2005.

Meanwhile, Equate, a joint venture between PIC (45 per cent), Union Carbide (45 per cent) and Boubyan Petrochemicals (10 per cent), sent out invitations last year to banks to participate in a $900 million refinancing loan facility.

The $2 billion Equate project was launched in 1997 with a $1.2 billion loan from some 54 financial institutions.