B. Matar, D. A. ALQALLAF, I. ALESMAIL and F. AL-MUTAIRI, Kuwait National Petroleum
Co., Ahmadi, Kuwait
pandemic is regarded as one of the most exceedingly difficult challenges faced in
the oil and gas industry's history. Refineries around the world encountered daunting periods in operating
their units at their turndown capacities and were
forced to temporarily shut down units at their facilities. These unexpected conditions
added substantial pressure on refinery production volumes and profit margins to
survive in this challenging market situation, compelling refiners to adapt and improvise.
The unparalleled quarantines and lockdowns imposed due to COVID-19 had serious consequences
on fuel demand and oil prices.
demand declined drastically during the pandemic, forcing refineries to adjust units’
operations. The gasoline-producing units were strained; however, some had flexibility.
Fluid catalytic cracking (FCC) and naphtha reforming units are extremely
flexible, as they play a vital role in optimizing
refinery economics. The FCC unit (FCCU) converts vacuum gasoil/coker gasoil (VGO/CGO),
upgrading feedstocks into high-value fuels and chemicals feedstock, which boost
the value of refinery product slates. Moreover, naphtha reforming, isomerization
and alkylation have a significant contribution to gasoline production.
article features a comprehensive analysis of the difficulties and challenges that
Kuwait National Petroleum Co. (KNPC) experienced in facing the decline in gasoline
demand, as well as the adaptations made to operating units to meet the COVID19 pandemic’s
impact and improve gasoline production.
During the pandemic, gasoline demand dropped drastically, forcing unit
throughput reduction and shutdown. This period coincided with KNPC’s Clean Fuel
Project (CFP) commissioning, which included new gasoline producing units. The
following is a detailed description of the impact the epidemic had on gasoline
demand in Kuwait, and how KNPC turned from gasoline importer to an exporter of
KNPC: An introduction on gasoline. KNPC has two
refineries: Mina Abdullah (MAB) and Mina Al-Ahmadi (MAA). Both refineries have modern
units to produce clean-burning fuels conforming to Euro-V standards.
to the completion of the CFP, the MAA and Shuaiba (SHU) refineries were the primary
producers of gasoline, each producing three different grades. As per KNPC
plans, the SHU refinery closed in February 2017, leaving the MAA refinery as
the only gasoline producer in Kuwait. After the closure of the SHU refinery, Kuwait
Integrated Petroleum Industries Co. (KIPIC) commissioned the Al-Zour refinery in
early 2023. The Al-Zour refinery was planned by Kuwait Petroleum Corp. (KPC) to
provide feedstock for Kuwait’s power stations, as well as replace the SHU
produces three different octane gasoline grades: UL-91, UL-95 and UL-98. While the MAA refinery produces all
three grades, the SHU refinery was able to produce only UL-91 from its 15,800-bpd
reformer unit (a gasoline-blending component).
refinery streams are blended to produce gasoline in different grades. The
primary streams are:
reformate is the main gasoline component, which is produced in two identical platforming
processes. Each process train consists of a naphtha hydrotreater (NHT), a naphtha
splitter and a continuous catalyst regenerator (CCR) platformer. The aim of the
complex is to produce reformate with a research octane number (RON) of 102, a
motor octane number (MON) of 90.06 and a maximum benzene content of 1 vol%. The
primary gasoline stream qualities are shown in TABLES 1 and 2.
platformer train has a capacity of 18,000 bpd. The CCR’s throughputs can be
varied depending on gasoline demand. Prior to 2001, gasoline requirements were
normally met by one reformer; however, the second reformer’s operations may be
required as per KPC’s reformate export requirements directive or in the case of
FCCU shutdown (FIG. 1).
Post-2003, domestic demand increased steadily until it surpassed the nation’s refineries'
production rate, leading to continuous gasoline and MTBE imports until the
commissioning of the CFP in 2020.
light and heavy gasoline are products from the FCCU—also referred to as FCC
light and heavy naphtha. The 40,000-bpd FCCU has two streams that are treated
separately in merox treatment units to remove mercaptans. Both streams have a
moderate octane rating of 92 RON and 93.1 RON, respectively, with high olefins
(alkene) content and moderate aromatics levels. Although both components are
excellent in gasoline blending, FCC heavy naphtha blending is limited due to
its high density and exceptionally low distillation recovery.
is produced in the alkylation unit, which is part of the MAFP (MTBE,
alkylation, FCC) block. The unreacted C4 raffinate from the MTBE
unit is fed to the alkylation unit to produce alkylate—the production rate is 3,900
bpd. Alkylate is produced by reacting isobutene and
light olefins in the presence of sulfuric acid catalysts. The alkylate product
has a boiling range of gasoline, a high octane rating of up to 97 RON and is an
excellent blending component in gasoline.
is produced in the MTBE unit, which is part of the MAFP block. The feed is the
total C4s bottom stream of the C3/C4 splitter
in the FCC liquefied petroleum gas (LPG) splitter unit. This unit converts most
of the isobutene in the C4 stream into MTBE. This is achieved by
reacting methanol and isobutene in the presence of an ion exchange resin-type
catalyst. MTBE is used in gasoline as an additive to enhance octane rating and
components are blended to meet product specification requirements, which have
winter and summer specs. Typical product specifications are summarized in TABLE 3.
Post-CFP gasoline production. KNPC’s CFP involved the upgrade and integration of the MAB and MAA refineries,
and the closure of the SHU refinery. The project increased the combined
capacity of the refineries from 736,000 bpd to 800,000 bpd and lowered the sulfur
content of petroleum products to 10 parts per million (ppm). Additionally, certain
facilities at the neighboring SHU refinery were renovated as part of the
project. Selected offsite facilities of the refinery—including storage,
blending and shipping/logistics—were integrated with MAA and MAB refinery operations.
After the CFP’s completion, the country was
able to produce ultra-low sulfur gasoline. The existing gasoline blending
facilities were upgraded to adhere to KPC’s Euro-V specification and production
was increased. Different streams were included in the project to reduce aromatic
content and limit the presence of benzene. The following blend components were
added to produce different grades of gasoline:
The gasoline streams’ properties post-CFP are detailed in TABLE 4.
COVID-19 and KNPC’s
refineries shift in demand and prices. The COVID-19 pandemic was a global crisis, with nations around the
world experiencing unprecedented levels of disruptions. The oil and gas industry
was significantly affected by the pandemic. Operations were interrupted, and production
reduced significantly due to workforce movement curfews, health regulations,
and decreased fuel and petrochemicals demand. Several companies set up systems
to protect their workers and perform their operations safely to mitigate the
crisis. Efforts to contain the virus disrupted the global workforce and
material supply chains.
KNPC, like other businesses, was not immune to
the challenges brought on by the effects of COVID-19. Travel restrictions and lockdowns
profoundly affected Kuwait’s domestic gasoline demand, which constrained refinery
operations to process crude oil at maximum capacities.
Oil prices dropped drastically in March and
April 2020 due to plummeting demand, rising crude oil supplies and diminished
storage capacities. It caused such a pronounced crude petroleum price drop
that, on April 20th, crude petroleum traded at a negative price in the intraday
futures market. Producer prices for crude petroleum declined 34% and 48.8% in
March 2020 and April 2020, respectively.
the COVID-19 pandemic, the global gasoline demand experienced a significant
decline, as well. As a result, gasoline production also declined in most
countries. When partial curfews were implemented in Kuwait, gasoline
consumption fell to record lows (FIG. 2). In turn, this affected the gasoline production
units at KNPC’s refineries. Domestic gasoline demand declined from pre-pandemic
levels of 10,000 tpd to 4,000 tpd and reached a low of 2,400 tpd in May 2020 (FIG. 3). From May
2020–August 2020, all gasoline imports ceased. FCCUs operated at turndown
capacity, and one of the naphtha reformers was kept idle. Consequently, naphtha
exports increased (FIG.
4). Furthermore, naphtha and gasoline prices fell dramatically, with
margins reaching a record low in April 2020 (FIG. 5). In view of decreased domestic demand
and no export options available, the MAA refinery was forced to lower
utilization or shut down their units to match the diminished demand.
Unit operations have played a significant role
in managing demand crises. Units such as the naphtha reformer and FCCU have
operational flexibility in terms of unit throughput and were kept at turndown
capacity. However, after the lifting of COVID-19 restrictions, Kuwait’s
domestic gasoline demand rose steadily and KNPC increased production to satisfy
this demand. Although gasoline imports were needed to bridge the nation’s
supply and demand gap, the completion of the CFP enabled KNPC to increase
production capacity by 40%. This increase—from the addition of a CCR unit at
the MAB refinery and the utilization of isomerzation, alkylation and de-isopentanizer
units—played a significant role in providing the flexibility to meet local
demand and export excess production.
However, gasoline exports were not attractive
due to a low naphtha-gasoline margin; therefore, post-pandemic plans focused
solely on meeting domestic demand. These economics changed in 2022 due to
worldwide political events and sanctions on various nations, which boosted
refiners’ margins to record highs.
Throughout 2022, KNPC managed to satisfy local
market demands and export excess quantities of gasoline. The exported cargoes—un-oxygenated
grades and 92 octane ratings—were sent to European markets. Since August 2022,
several gasoline cargoes have been successfully exported. The primary driver
was the substantial difference in the naphtha-gasoline margin, which was an
attractive market fundamental.
Takeaway. The COVID-19 pandemic had a tremendous impact on the world economy,
especially in the disruption of supply chains and global fuels demand. Refineries
suffered challenges in maintaining operations due to movement restrictions and drastic
changes in demand patterns. The reduction in demand necessitated more flexibility
in refinery operations.
drastic change in the world’s economic environment led to financial losses and
several refineries were forced to shut operations. The lesson learned is this: refineries
must have plans, strategies and built-in flexibility in place to hedge against unfavorable
circumstances and to capture favorable opportunities. HP
The authors would like to recognize the dedication and
challenging work performed by experienced KNPC staff for the growth of the
company to enhance the
overall profitability of KNPC’s refineries.
a chemical engineer and the Team Leader for Operational Planning at KNPC. He has
experience in refinery operations, planning and process engineering.
a Senior Engineer in the Operational Planning division at KNPC’s MAA refinery. She
has extensive experience in operational planning and is involved in several
studies with separate roles.
a chemical engineer at KNPC’s MAA refinery and works in the Operational Planning
a chemical engineer at KNPC’s MAA refinery and works in the Operational Planning