Kuwait to double oil refinery upgrade plan

BEIJING, Nov 9 (Reuters) Kuwait Petroleum Corp. (KPC) is set to add 110,000 to 150,000 barrels per day (bpd) of crude processing capacity at its existing refineries by 2012, nearly double its initial upgrade plan, a company official said on Thursday.

The addition is on top of state-run KPC's plan to build a new billion, 615,000-bpd refinery due around the same time, said Hamzah A. Bakhash, Deputy Managing Director of International marketing.

KPC was earlier expected to add 70,000 bpd of capacity to existing facilities.

''The existing refineries are adding new units, hydrocrackers, coker... to minimise fuel oil production,'' Bakhash told reporters on the sidelines of Hart Energy's World Refining&Fuel conference in the Chinese capital.

It has been a global trend in the refining business to cut down output of low-end fuel oil to favour high-value transportation fuels such as gasoline and diesel.

Bakhash did not spell out where the upgrades would be. Kuwait operates three facilities -- Mina al-Ahmadi, Mina Abdullah and Shuaiba -- with a total capacity of 920,000 bpd.

The firm plans to shut down the 200,000-bpd Shuaiba plant around the time the new refinery in al-Zour comes on line.

The completion of the massive new plant could add to a global overhang of refining surplus as predicted by analysts by 2010, as a result of rapid expansions in the Middle East, India and China, industry experts have said.

But Bakhash said Kuwait was not too concerned as the new complex targets primarily a booming domestic power utility market, in which the government is pushing the use of less-polluting low-sulphur fuel oil.

''It's not purely for economic reason... We need that for the sole requirement of cleaner fuel oil,'' Bakhash said.

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