Kuwait's KIPIC in talks with potential partners on petrochemicals complex
(Reuters) - State-owned Kuwait Integrated Petroleum Industries Company is in early talks with companies to partner on an integrated petrochemicals complex worth up to $9.70 B, its CEO said.
The company also aims to raise capacity at its Al-Zour refinery by 20-30% above the maximum 615,000 barrels per day it expects to reach this month, Walid Al-Badr told Reuters.
Initial discussions have begun with three potential partners, two from Asia and one from Europe, to build an integrated petrochemical complex alongside the Al-Zour plant, Al-Badr said.
"We are still in the initial stages. Memorandums of understanding have not been signed yet, but they expressed their interest and there were official meetings," Al-Badr said, without naming the firms.
The petrochemical complex, which aims to export to Europe and to boost Al-Zour's profitability, will use about 100,000 barrels per day (bpd) of fuel oil. If a deal is reached, it aims for the plant to go into operation by 2030.
It will target annual production of 2.7 million tons of aromatics and 1.7 million tons of olefins.
A partnership model has not yet been agreed on and KIPIC's parent is studying potential incentives for partners, Al-Badr said. About 60% of the project's financing would come from local and foreign banks, and the rest would be put up by KIPIC and the partner.
According to a document seen by Reuters, Kuwait's Oil Minister Saad Al-Barrak said in August in response to a parliamentary query that an Ernst & Young study had shown a lack of investor appetite for the petrochemicals complex.
REFINING BOOST
The planned refining boost to up to 800,000 bpd at Al-Zour is part of KIPIC parent Kuwait Petroleum Corporation's goal of reaching overall refining capacity of 1.6 million bpd.
The increase would not entail creating new facilities but instead boosting existing units' capacity to receive feedstock, Al-Badr said.
Kuwait's two other refineries, Al-Ahmadi and Mina Abdullah, have combined refining capacity of 800,000 bpd.
When Al-Zour - currently refining about 410,000 bpd - reaches its 615,000 bpd previously stated full capacity this month, Kuwait will be able to refine 1.415 million bpd.
The additional Al-Zour capacity will be possible within months of "safe and stable operation" of the facility at 615,000 bpd, Al-Badr said.
Since commercial operations began last November, Al-Zour has exported 1.7 million tons of jet fuel and ultra-low-sulfur-diesel to France, Greece, the Netherlands and Britain.
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