After the Clean Fuel Project commissioning, most of the markets in the world will be open to our products.

Mutlaq Rashed AL AZMI Deputy CEO for the Mina Abdullah Refinery KUWAIT NATIONAL PETROLEUM COMPANY

New horizons

June 9, 2017

Mutlaq Rashed Al Azmi, deputy CEO of the Mina Abdullah refinery (MAB) for Kuwait National Petroleum Company (KNPC), talks to TOGY about the progress the company is making on the MAB portion of KNPC’s Clean Fuel Project (CFP), how the completion of the CFP will increase the competitiveness of Kuwait’s refined products and the markets KNPC plans to target once the CFP is on stream.

Mutlaq Rashed Al Azmi, deputy CEO of the Mina Abdullah refinery (MAB) for Kuwait National Petroleum Company (KNPC), talks to TOGY about the progress the company is making on the MAB portion of KNPC’s Clean Fuel Project (CFP), how the completion of the CFP will increase the competitiveness of Kuwait’s refined products and the markets KNPC plans to target once the CFP is on stream.

• On mega-projects: “KNPC is embarking on a series of larger-scale projects which will be landmark projects for Kuwait and which will present both challenges and opportunities. We are counting on the competency and education of our staff to complete these and we are certain that we will meet the targets safely.”

• On international standards: “Markets outside Kuwait currently do not accept most of our products because they do not conform to these standards. After the CFP commissioning, most of the markets in the world will be open to our products, which will make the industry much more competitive internationally than it is now.”

Al Azmi also discussed global trends in the downstream sector. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Mutlaq Rashed Al Azmi below.

 

What are the latest updates on the MAB Package?
Mina Abdullah’s portion of the CFP is going according to plan even though there are some challenges here and there. We finished the engineering and started construction, which is a major milestone for us. More than 30,000 people will be needed in the workforce at the peak of construction and, if you add to that the number of people who will be working at the Al Zour refinery, the number will be 60,000. It is slated for completion in 2018.
The construction will take place until the end of March 2017 and we are ahead of that schedule. As of December 2016, the overall [progress] of the CFP was 76.9%. The plan was to have progress of around 70% by then, and we have achieved more than that. For the 2017/18 fiscal year, which starts in April 2017, we are going to start commissioning part of the MAB plant.
We have already commissioned most of the electrical system and, by the end of March or beginning of April 2017, we will start commissioning some of the utilities. Furthermore, we have worked on the fire water distribution ring to make the facility safer and we have also started punch listing every section that is mechanically completed and handed over to the refinery. We will also start preparing to commission the cooling tower and the cooling system connected to it, such as the plant’s air facilities.
Another major achievement is the installation of a 1,500-tonne vessel, the largest in KNPC history, to the MAB Package (1) site of the CFP. The most recent milestone of the MAB Package (1) is the handing over of all underground CWS/CSR [cooling water supply/cooling water return] lines, which is forecasted to be completed by April 2017. Finally, the major milestone for the MAB Package (2) site will be the commissioning activities for the cooling water system, which is slated to begin in June 2017.

Once the CFP is completed, how do you see Kuwait’s competitiveness changing in the global downstream market?
Having a new refinery or constructing a new project is beneficial to the Kuwaiti market for a number of reasons. One of the reasons is that activities such as these employ Kuwaiti nationals. Another reason is that, even though MAB and MAA are running well as refineries and their integrity is sound, the product quality that has been produced from those designs needs to be upgraded to keep up with international standards, especially those of Europe and the US.
Markets outside Kuwait currently do not accept most of our products because they do not conform to these standards. After the CFP commissioning, most of the markets in the world will be open to our products, which will make the industry much more competitive internationally than it is now. Furthermore, it is going to boost the local economy because the government requires that 20% of contract prices be shared by local vendors, suppliers and subcontractors. Once the CFP is completed, these requirements will be met.

What new markets can this new refinery target after completion? Will it target markets together with Kuwait Petroleum International?
For the time being, we are mostly targeting Asian and African markets. After the CFP is completed, though, we will also be targeting the European market in addition to the South Korean and Japanese markets.
We have a downstream and upstream vision for KNPC that involves aggregating all the downstream facilities we have. KPI is our international arm, KNPC deals with Kuwait and PIC [Petrochemical Industries Company] deals with the petrochemical aspect of things. All of these companies follow the same strategy to enhance our product slate. We are therefore working in coordination with KPI in targeting these markets.

Which global trends in the downstream sector will affect Kuwait’s competitiveness in the coming decades?
The governing factor in our industry is profit margin, which is mostly determined by the cost per barrel that one is producing. The new refineries will be more efficient and will increase production while reducing its cost because they will have larger units with lower manpower requirements.
Another trend is that the price of oil price is going down, which means that the price of products is going down. We are therefore in favour of renewables and we have a strategy to produce 15% of our global energy here in Kuwait using renewables in the form of either solar, thermal or wind power. Despite this, the energy that is being produced by fossil fuels will remain; it just has to be cleaner, more affordable and more efficient.

Could you tell us about the solar-powered petrol station project that KNPC recently announced?
We are working hard to commission a large-scale project that we call the Al Dibdibah solar project. The complete unit of this will have a 1-GW capacity and will cover an area of 30 square kilometres.
KNPC is also embarking on a series of larger-scale projects which will be landmark projects for Kuwait and which will present both challenges and opportunities. We are counting on the competency and education of our staff to complete these and we are certain that we will meet the targets safely.

For more information on KNPC and Kuwait’s downstream sector, see our business intelligence platform, TOGYiN.
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