Kuwait is set to ramp up refined oil product exports from its new Al Zour refinery in the second half of 2023 to plug Russian shortfalls in Europe and meet growing demand in Asia and Africa, industry sources and analysts said.
The much delayed 615,000 barrel-per-day (bpd) refinery is one of several new complexes coming online this year across the world to churn out more oil products and cool refining margins from record levels last year following the disruption of supplies from top exporter Russia.
Kuwait is boosting oil product exports to Europe, Africa, Asia, and the Americas after Western sanctions on Russia reshuffled energy trade routes globally.
The OPEC producer is expected to reduce crude exports and crank up product shipments as it starts up another two crude distillation units (CDUs) at Al Zour later this year to operate the refinery at full capacity, the sources said.
Al Zour, designed to process medium-heavy crudes, started up the first 205,000 bpd CDU in September, and is currently running at between 70% and 80% of its capacity as it stabilizes production, a source familiar with the matter told Reuters.
Kuwait’s key refined products exports hit an all-time high of 17 million barrels in January, up 30% on the year, as Al Zour shipped more fuel oil to the Singapore Strait, diesel and jet fuel to Europe, and naphtha to China, South Korea, and Japan, Kpler data showed.
Consultancy FGE expects Al Zour’s second CDU to start up in March or April while the third one could come online by August. The three CDUs are of equal capacity.