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Sinopec Engineering wins contract at Mina Al Ahmadi refinery
Plan to expand Kuwaits’s refining capacity include the huge Al Zour complex, which is being built with Chinese participation and is on schedule to start up in 2019
Michael Marray 12 Sep 2018

Sinopec Engineering Group (SEG) has been awarded an engineering, procurement and construction (EPC) contract for the Heating Furnace Modification Project at the Mina Al Ahmadi (MAA) refinery in Kuwait.

This is the first EPC project that SEG is undertaking as an independent contractor in Kuwait, and was made via its affiliate Sinopec Luoyang Engineering Co. In spite of the small size of the contract, which local press put at US$30 million, Sinopec Engineering says that it lays a foundation to further secure and develop the project market in Kuwait, and undertake more middle and high-end projects in Kuwait and the Middle East.

The award for the three-year project was made by Kuwait National Petroleum Corporation (KNPC) in August. KNPC is principally engaged in refining and gas processing projects in Kuwait, and is a subsidiary of Kuwait Petroleum Corporation (KPC).

Kuwait is in the midst of revamping its downstream facilities, and upgrading its refineries. The Mina Al-Ahmadi Refinery dates back to 1949, and is going through a major upgrade and expansion. It is located 45 kilometres south of Kuwait City. Also being upgraded is the Mina Abdullah refinery, while the old Shuaiba refinery was closed in 2017.

The most important part of the plan to expand refining capacity is the huge Al Zour complex, which is being built with Chinese participation, and which is on schedule to start up its first refining units in 2019.

Adding together the upgrades of existing refineries and the construction of Al Zour, Kuwait has ambitious plans to double its current oil refining capacity to 1.7 million barrels per day by 2025.

Total investment in Al-Zour is expected to be US$13 billion, and will be one of the biggest refineries in the Middle East, producing ultra-low sulphur oil products for mainly domestic consumption, but with plans for international sales. Most domestic power generation plants currently burn high sulphur oil. Under the Clean Fuels Project, Kuwait is putting in place a programme to reduce emissions.

Back in 2015, a consortium formed by Sinopec Engineering Group, Técnicas Reunidas of Spain, and Hanwha Engineering &Construction of South Korea, signed an agreement with KPC for an EPCC-Turn Key contract, which includes the engineering, procurement, construction, pre-commissioning and assistance during commissioning/start-up/performance testing. The estimated contract value is US$4.24 billion. Técnicas Reunidas is the majority partner with 50%, while Sinopec Engineering has a 40% stake.

There is growing co-operation between China and Kuwait, and construction work is proceeding on the Sino-Kuwait Guangdong Integrated Refinery & Petrochemical joint venture project.

The memorandum of understanding (MoU) for the facility, at Donghai Island near the city of Zhanjiang, was signed back in 2009, but the project encountered several delays.

According to the project sponsors, once the facility comes on stream, it will play a strategically important role in strengthening national energy security, give full play to the petrochemical industry cluster effect, provide sufficient raw materials for the development of downstream industries, extend the petrochemical midstream and downstream industry chains, and promote the development of relevant industries in Zhanjiang City.

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