Kuwait's oil exports shift from crude oil to petroleum products

Kuwait’s oil exports are shifting from crude oil to refined petroleum products following the addition of new refining capacity, according to data in our recently updated Country Analysis Brief, said Hydrocarbonprocessing.

In June and July 2023, Kuwait exported more than 1 million barrels per day (b/d) of petroleum products and liquified petroleum gas, the highest volume of products the country has exported. By contrast, crude oil exports averaged about 1.6 million b/d in June and July, down from an average of 1.8 million b/d in the same period of 2022.

As of July 2023, refineries in Kuwait had the capacity to process 1.4 million b/d of crude oil, more than double the refinery capacity in January 2021 of 600,000 b/d. The increase in capacity comes from the new Al Zour refinery and an expansion project at existing refineries over the past two years. Kuwait’s new Al Zour refinery is the Middle East’s largest with a capacity of 615,000 b/d among three units. The plant’s first crude oil distillation unit came on line in November 2022, followed by the second in March 2023 and the third in July 2023. The Al Zour refinery can produce significant amounts of low-sulfur fuel oil, around 220,000 b/d at full capacity.

n late 2021, national refining company Kuwait National Petroleum Corp. (KNPC) completed its Clean Fuels Project (CFP). The CFP upgraded and integrated the company’s Mina Al-Ahmadi and Mina Abdullah refineries to be able to process petroleum products with low levels of sulfur and nitrogen oxide. The upgrade allowed production of fuels that meet the Euro 4 and 5 standards for products with lower emissions. The CFP increased Kuwait’s crude oil refining capacity by around 60,000 b/d.

Kuwait’s crude oil exports fell from an average of 1.9 million b/d in 2022 to less than 1.8 million b/d for the first 7 months of 2023. By July 2023, crude oil exports dipped to 1.5 million b/d, according to Kpler tanker tracking service.

In July 2023, Asia remained the top destination for Kuwait’s petroleum product exports, receiving 46%. However, Europe received 29% in July 2023, up significantly from 2021. In July 2021, Europe received 11% of Kuwait’s petroleum product exports. Increased exports to Europe resulted from Europe’s ban on imports from Russia as EU countries look to replace diesel and other products that they used to receive from Russia.

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Tecnicas Reunidas, S.A. and Sinopec Engineering Group Co. Ltd. have signed in Beijing a Strategic Alliance Cooperation Agreement for the joint execution of Refining, Petrochemicals, Natural Gas and Transition Projects worldwide, said Hydrocarbonprocessing.

Both Companies have successfully cooperated in close to 20 projects since 2006 and are presently bidding together for several business opportunities in different countries.

With the signature of this long- term global business Agreement both Companies will jointly look for future opportunities to strengthen the collaboration in projects and markets where their experience will foster a synergy for the development of new joint business.

We remind, Peacock will sell all of the electricity it generates under a long-term power purchase agreement to Gulf Coast Growth Ventures (GCGV), a joint venture between ExxonMobil and SABIC, which produces materials used to manufacture clothes, food containers, packaging, agricultural film and construction materials.

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Russia said on Sept. 21 it had temporarily banned gasoline and diesel exports to all but four ex-Soviet states in response to domestic shortages, a move that will disrupt global trade that has already had to adjust to Western sanctions on Russian fuel exports, said Reuters.

Russia eased some of the restrictions on Sept. 25, saying it would allow the export of bunkering fuel for some vessels and diesel with high sulfur content. But analysts say importers will still have to find alternative sellers until Russia can replenish its own stocks. What caused the problem?

Traders said the fuel market in Russia, one of the world's biggest oil producers, was hit by a combination of factors including maintenance at oil refineries, bottlenecks on railways and the weakness of the rouble, which incentivizes fuel exports.

Russia tried to tackle the diesel and gasoline shortages in recent months but turned to export curbs to prevent a fuel crisis, which could be awkward for the Kremlin as a presidential election looms in March. How big a problem is this for world fuel markets?

The diesel ban will have the biggest impact because Russia is the world's top seaborne exporter of the fuel, just ahead of the United States.

It shipped an average 1.07 million barrels per day (bpd) of diesel from the start of the year to Sept. 25, accounting for more than 13.1% of the total seaborne diesel trade, according to oil analytics firm Vortexa.

It is a much less significant gasoline exporter, shipping an average 110,000 bpd in the year to Sept. 25, Vortexa said.

We remind, Russian government has approved some changes to its fuel export ban, lifting the restrictions for fuel used as bunkering for some vessels as well as diesel with high content of sulfur. It also lifted restrictions on the export of fuel already accepted for export by the Russian Railways and Transneft before the initial ban had been announced last week. The ban on all types of gasoline and high-quality diesel remains in place.

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Neste has expanded its capability to supply renewable fuels to customers on the West Coast of the United States in cooperation with Vopak, a leading energy industry infrastructure provider, said Hydrocarbonprocessing.

Neste commissioned terminal capacity at Vopak’s Los Angeles terminal in California for storing Neste MY Sustainable Aviation Fuel (SAF) and Neste MY Renewable Diesel. This is a major step in further expanding the availability of Neste’s renewable fuels in the Southern California region, enabling greenhouse gas emissions reductions in the transportation sector and supporting the energy transition on the West Coast of the U.S.

The Vopak Los Angeles Terminal is strategically located in the Port of Los Angeles and is well-connected to fuel logistics via vessels, barges, trucks and pipelines, for example. Having terminal capacity at this location will significantly increase the availability and accessibility of Neste's renewable fuels to customers at critical hubs in the Los Angeles area, such as SAF for airlines at the Los Angeles International Airport (LAX), one of the world’s largest airports, and renewable diesel (also locally known as R99) for fueling stations serving road transportation all the way to San Diego.

“Neste is fully committed to supporting the energy transition in the U.S. as well as globally by working closely together with partners to increase the availability of our renewable fuels. Our cooperation with Vopak shows how repurposing existing fuel distribution infrastructure can accelerate the much needed transition to renewable energy. California has been at the forefront of adopting and endorsing climate-friendly policies and solutions. We are glad to enable more cities, businesses and individual travelers in the state to take advantage of Neste’s renewable solutions to reduce their emissions and help fight against climate change,” says Annika Tibbe, acting President for Neste US.

“We are proud to serve Neste. Repurposing Vopak’s assets from oil and traditional fossil fuel products to low-carbon energy solutions is right on target with our strategy. We are happy that our services and infrastructure have been selected and are committed to being a part of the Los Angeles energy transition,” says Maria Ciliberti, Vopak President United States and Canada.

Neste has been supplying renewable fuels to California since 2016 after the state adopted its Low Carbon Fuel Standard (LCFS). According to data from the California Air Resources Board, as of the first quarter of 2023, 49% of California’s diesel pool is renewable diesel. Since the inception of the LCFS program, renewable diesel has displaced over 5.3 billion gallons (approx. 16 million tons) of fossil diesel. Today, Neste’s renewable diesel is used by many municipalities and businesses in the state, and Neste’s SAF is available at all of the major airports in California.

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bp has started construction on its 187MWdc Peacock Solar project, located 10 miles north of Corpus Christi in San Patricio County, Texas, helping support the global transition to lower carbon energy, said Hydrocarbonprocessing.

Peacock will sell all of the electricity it generates under a long-term power purchase agreement to Gulf Coast Growth Ventures (GCGV), a joint venture between ExxonMobil and SABIC, which produces materials used to manufacture clothes, food containers, packaging, agricultural film and construction materials.

Located near the GCGV complex, Peacock will supply power directly to the facility. Once complete, the installation will generate enough renewable energy annually to power the equivalent of 34,000 homes. The project is expected to create around 300 jobs during construction and provide more than $25 million in tax revenue over the first 25 years of the project’s life.

“Securing this agreement and kicking off construction of Peacock helps support the transition to lower carbon energy, while benefiting local communities and the economy,” said Dave Lawler, bp America chairman and president. “It’s another way bp is accelerating growth of our US solar generation capacity, investing in America, and advancing our transformation to an integrated energy company.”

"Securing this agreement and kicking off construction of Peacock helps support the transition to lower carbon energy, while benefiting local communities and the economy."

Dave Lawler, bp America chairman and president “We want to be good stewards of our environment,” said Paul Fritsch, president at GCGV. “Once online, the solar-generated electricity will be used to partially power our plant and help reduce emissions in support of a net-zero future.”

bp’s 50:50 joint-venture partner, global solar leader Lightsource bp, is developing the project and managing the construction on behalf of bp.

PCL Construction, the main engineering, procurement and construction contractor for the project, will install ultra-low carbon solar panels and trackers from US-based manufacturers First Solar and GameChange Solar, respectively.

We remind, Neste has expanded its capability to supply renewable fuels to customers on the West Coast of the United States in cooperation with Vopak, a leading energy industry infrastructure provider. Neste commissioned terminal capacity at Vopak’s Los Angeles terminal in California for storing Neste MY Sustainable Aviation Fuel (SAF) and Neste MY Renewable Diesel.

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