Kuwait’s KPI eyes strategic fuel partnerships

Kuwait

Shafi Taleb Al-Ajmi, president and CEO of Kuwait Petroleum International (KPI), talks to The Energy Year about the company’s strategic operations and the importance of sustainability and decarbonisation. KPI, an international subsidiary of KPC, refines and markets fuel, lubricants and various other petroleum derivatives globally.

This interview is featured in The Energy Year Kuwait 2023

What are Kuwait Petroleum International’s most strategic operations?
In 1983, KPC acquired most of Gulf Oil’s refining and marketing operations in Western Europe and established Kuwait Petroleum International in London to manage these interests. KPI is 100% owned by KPC, the national oil company of Kuwait. In 1986, the Q8 brand was launched and continues to be the trademark of KPI’s fuel stations all over Europe.
KPI operates over 4,700 retail stations across Europe, with a concentration on Italy, Spain and the Benelux region. This includes approximately 1,000 retail stations in Sweden and Denmark through OKQ8, a 50-50 company with the Swedish company OKF. Another large part of our business is done through Q8Aviation, our aviation fuel supplier, fuelling over 200 of the world’s major airlines in 64 airports around the globe. We also have two state-of-the-art lubricant plants in Antwerp, Belgium and on the outskirts of Milan, Italy, both of which produce over 1,000 different grades of oil under our brand, Q8Oils.
KPI also has three JV refineries: a 50-50 refinery with a refining capacity of over 200,000 bpd in Milazzo, Italy with the Italian oil company Eni; a 35.1% share in a 200,000-bpd refinery in Nghi Son, Vietnam, in collaboration with Petrovietnam and Japanese companies Idemitsu Kosan and Mitsui Chemicals; and a 50-50 refinery with a refining capacity of 230,000 bpd in Duqm, Oman with Omani national oil company OQ.
Today, Q8 employs 3,600 professionals from all over the world, and markets approximately 400,000 bpd through its aviation, direct and lubricant business and more than 4,700 retail service stations.

What are the latest updates on the Duqm Refinery project?
The Duqm refinery (OQ8) is a grass-root joint venture project between KPI and OQ, with each having a 50% share. It is located 600 kilometres south of Muscat in the Special Economic Zone at Duqm (SEZD), a maritime transit hub and a logistics gateway to Oman and the region facing the Indian Ocean. As of March 2023, the project has reached 92% completion, and commercial operation is expected in January 2024.
The refinery shall process 230,000 bpd of Kuwaiti and Omani crude oil with LPG, naphtha, ATK [aviation turbine kerosene], diesel, sulphur and petroleum coke being its primary products.
The Duqm refinery will operate as a merchant refinery with a main processing objective of maximising diesel production while meeting Euro 5 standards.
OQ8 is currently the largest existing joint venture among countries of the Gulf Cooperation Council and stands as a proud testament to the strength of Kuwaiti-Omani relations.

What are your key strategic priorities for the years to come?
KPI strives to be a leading energy player in the downstream market, quick to adapt to rising and developing dynamics and trends. Our main priority is to deliver energy and services that fuel the growth of countries where we operate, driven by commercial sustainability, investing in our people and being a committed and reliable partner within our communities and markets.
In Europe, where our core business is located, we are focused on becoming a successful mobility player by leveraging innovation and adopting the highest standards to achieve operational excellence.
Beyond Europe, KPI has several partnerships with top oil players within the refining industry, where we aim to maximise value chain optimisation. KPI maintains its ambition to sustain its business through strategic investments to further strengthen its existing portfolio in alliance with reliable partners to realise viable business opportunities, while leveraging Kuwaiti hydrocarbons internationally. We also aim to excel as an energy and fuel service provider, while fully adapting to environmental regulations and implementing alternative energy trends that are emerging within the industry.

What are the key trends shaping the global downstream sector?
In terms of downstream activities, we aspire to remain an internationally competitive, integrated refining and petrochemicals player. To achieve top-quartile performance and financial results, we strive to continuously improve our operational and financial performance to capitalise on our assets and extract the most value from the barrel. We are also pursuing petrochemicals integration opportunities, targeting maximum refinery margins and reliability.
Looking to the future, our energy transition agenda will gain prominence. Partnerships with tech leaders, ventures into new businesses and investment opportunities, and the creation of marketing alliances will help propel us towards achieving our long-term strategy.

How important are sustainability and decarbonisation goals in KPI’s growth strategy?
We are focused on the future. With sustainability and digital transformation within our grasp, we aim to reach our goal of becoming a hub for energy and mobility services. It is of the utmost importance that we utilise our natural resources responsibly to provide cleaner products and greener services, and to reduce our carbon footprint.
At the same time, we are making our own business operations more sustainable, working towards our ambitious goal of being carbon neutral by 2025. We are doing this by investing in renewable energy, more environmentally friendly road transport and more efficient buildings, depots and stations. We are working hard to promote an internal sustainability awareness and culture within Q8.
Q8 is committed to sustainability and helping the energy transition. In Italy and the Benelux, we offer our customers electric charging for their EVs as well as gasoline and diesel blended with biofuels. Furthermore, in several of our retail stations, we use solar cells to meet a part of our power needs. Our JV in Scandinavia goes one step further by supplying electricity to the grid using renewable energy. In addition, Q8 also contributes by providing sustainable aviation fuel (SAF) in UK and French airports, where we are currently present.

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