Petroleum Refining – Chapter 01: Introduction

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Chapter 1 INTRODUCTION

On February 22nd, 1938, oil was discovered in the Burgan field of Kuwait. The Kuwait desert had long stood

witness to several strange black patches of a rough bituminous substance.

Kuwait was aware of the activities of the oil prospectors in neighboring Bahrain, Saudi Arabia, Iraq and

southern Iran. Their expectations raised by the Bahrain oil discoveries of 1932, the people of Kuwait were

hopeful that these surface deposits were indications of underground reservoirs of crude oil.

Signing of the Oil Concession Agreement

On December 23rd, 1934, Sheikh Ahmad Al-Jaber Al-Sabah signed the first Kuwait Oil Concession

Agreement to Kuwait Oil Company Limited. Kuwait Oil Company, Ltd. was formed by the Gulf Oil

Corporation (presently Chevron Oil) and the Anglo-Persian Oil Company (presently British Petroleum).

Discovery of Oil

On 22nd February 1938 oil was discovered in “Burgan No. 1”. Even today, this first well continues to

produce.

The Silver Wheel: The First Oil Shipment

On 30th June 1946, His Highness the late Sheikh Ahmad Al-Jaber Al-Sabah turned a silver wheel to start

Kuwait's first crude oil export aboard the tanker "British Fusilier". This enabled the State of Kuwait to join the

ranks of the world's major oil producers by exporting the first Kuwait’s oil shipment of 10,567 tons.

Nationalisation of the Oil Industry

A new era of historic importance began on

6th December 1975 with the

Nationalisation of Kuwait's oil industry.

Kuwait began negotiations in the early

1970s to restore control over its own

natural oil resources. By mutual

agreements with the Company's two

original partners, the State's shareholding

in Kuwait Oil Company was progressively

increased until full control was achieved.

On March 5th, 1975, an agreement was

signed by the State of Kuwait and the two

oil companies (British Petroleum and Gulf)

giving Kuwait complete control of its oil

resources.

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Why refine crude oil?

1. Provide high quality refined products and LPG to local market.

2. Provide a reliable and secure outlet for Kuwaiti crude oil in the form of refined products.

3. Contribute to national economy,

• Adding maximum value to Kuwait's hydrocarbon products,

• Providing employment opportunities and career development to nationals

• Stimulating industrial growth domestically.

Kuwait National Petroleum Company (KNPC) Brief History

• 1960 (October) Kuwait National Petroleum Company was established as a shareholder

company owned by the government and the private sector.

• 1968 the company commissioned its own "Shuaiba Refinery" which was retired in 2017.

• 1975 the company became a fully owned state company.

• 1980, KNPC became fully owned by Kuwait Petroleum Corporation (KPC) when it was

established by the State of Kuwait.

• KNPC was entrusted with the responsibilities of oil refining and gas liquefication as well as

the distribution of petroleum products in the local market on behalf of KPC. Consequently,

the company became in charge of the oil refineries in Kuwait located at

- Mina Abdulla,

- Mina Al-Ahmadi,

Kuwait Integrated Petroleum Industries Company (KIPIC)

• Al-Zour (ZOR) refinery & petrochemicals Project.

• To be commissioned 2019.

Table 1-1 Kuwait Petroleum Corporation (KPC) Subsidiaries 1 KOC Kuwait Oil Company Local Exploration, drilling, production of crude oil

& Natural Gas. 2 KUFPEC Kuwait Foreign Petroleum Exploration

Company International Exploration, drilling, production of crude oil & Natural Gas.

3 KNPC Kuwait National Petroleum Company Oil Refining at mina Abdullah and mina al-Ahmadi.

4 KIPIC Kuwait Integrated Petroleum Industries Company

Refining & Petrochemicals at Al-Zour.

5 PIC Petrochemical Industry Company Petrochemicals.

6 Q8 Kuwait Petroleum International Refiner and market oil refined products globally.

7 KGOC Kuwait Gulf Oil Company Divided zone.

8 KOTC Kuwait Oil Tankers Company Oil Transportation.

9

Millazo Refinery, Sicily, Italy Refining.

10

Nghi Son, Vietnam. Refining & Petrochemicals.

11 DRPIC Dugm, Oman Refining & Petrochemicals.

Petroleum Refining – Chapter 01: Introduction

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Millazo Refinery, Sicily, Italy.

The Milazzo refinery a joint venture between Kuwait Petroleum International and oil and gas major ENI, is

one of Europe's most sophisticated refineries and can berth the world's largest supertankers.

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Nghi Son Refining & Petrochemicals Project, Vietnam.

Nghi Son Refinery is the second planned oil refinery in Vietnam. It would be located about 200 kilometers

(120 mi) south of Hanoi in Tinh Gia District of Thanh Hóa Province. Site-clearing for the project broke

ground in 2008. Construction began on 23 October 2013, and refinery operations are targeted for 2017.

Planned capacity is 200,000 barrels per day (32,000 m3/d) of crude oil imported from the Middle East,

producing petrochemical products such as gasoline, diesel oil, kerosene, jet fuel and polypropylene.

Ownership and Operations

The owner is Nghi Son Refinery and Petrochemical Limited Liability Company which is a joint venture

formed by Kuwait Petroleum International (35.1%), Idemitsu Kosan Co., Ltd (35.1%), Vietnam Oil and Gas

Corporation (25%) and Mitsui Chemicals, Inc. (4.8%).

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Duqm Refinery and Petrochemical Industries Company (DRPIC)

Duqm Refinery and Petrochemical Industries Company (DRPIC) is a 50/50 Joint Venture between the state-owned Oman Oil Company (OOC) and Kuwait Petroleum International (KPI), the international subsidiary of Kuwait Petroleum Corporation.

• The refinery contains the following refining units:

• crude distillation unit (230,000 BPSD),

• vacuum distillation units (114,000 BPSD),

• hydrocracker unit (74.000 BPSD),

• delayed coker unit (52.000 BPSD),

• kerosene treatment unit (40.500 BPSD),

• diesel hydrodesulphurization unit (83.500 BPSD),

• LPG treatment unit (2 x 12.500 BPSD),

• hydrogen production unit (2 x 126.500 Nm3/d),

• saturated gas unit (6.500 mT/d),

• sour water stripper unit (2 x 44 mT/d),

• amine regeneration unit (2 x 415 mT/d) and

• sulphur recovery unit (3x355 mT/d).

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Mina Abdullah Refinery

Mina Al Ahmadi Refinery

AlZour Refinery

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• Oil is the largest global business

Table 1-2 Global largest oil and gas companies by revenue e

Country Company name

Revenue 2015

(US$ billion)

1

Saudi Aramco 455.49

2

Sinopec 448

3

China National Petroleum Corporation 428.62

4

PetroChina 367.982

5

Exxon Mobil 268.9

6

Royal Dutch Shell 265

7

Kuwait Petroleum Corporation 251.94

8

BP 222.8

9

Total SA 212

10

Lukoil 144.17

11

Eni 131.82

12

Valero Energy 130.84

13

Petrobras 130.00*

14

Chevron Corporation 129.9

15

PDVSA 128.44

16

Pemex 117.5

17

National Iranian Oil Company 110.00**

18

Gazprom 106.3

19

Petronas 100.74

20

China National Offshore Oil 98.53

21

Marathon Petroleum 97.81

22

PTT 93.55

23

Rosneft 91.72

24

JX Holdings 90.67

25

Engie 89.64

26

Statoil 82.48

27

Indian Oil Corporation 81.55

28

Sonatrach 76.10**

29

Reliance Industries 73.1

30

Pertamina 70.65

31

Conoco Phillips 55.52

32

GS Caltex 50.26

33

Enterprise Products 47.95

34

Repsol 47.29

35

Centrica 45.29

36

Bharat Petroleum 43.46

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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37

OMV Group 43.09

38

SOCAR 39.7

39

Idemitsu Kosan 38.58

40

Hindustan Petroleum 37.85

41

PKN Orlen 36.1

42

Schlumberger 35.47

43

Suncor Energy 34.66

44

Hellenic Petroleum 31.28

45

Motor Oil Hellas 28.98

46

Ecopetrol 26.99

47

CEPSA 26.9

48

ONGC 24

* Revenue in 2013 ** Revenue in 2012

Sources: World Atlas, the daily records, and Wikipedia.

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Refinery Goal

≈ $100

1. Transportation fuels

ATK

JP5/9

Gasoline

Diesel

(more valuable)

(commercial jet planes)

(high flash jet fuel)

≈ $170+ /bbl

2. Light heating oils

No.1 & No.2

Basically transportation fuels with

deferent additives

(BP 30-650°F)

3. Lube oils

Less than 5% of fuel 4. Refrigeration oils

5. Transportation oils

6. Fuel oil

(High BP material)

Less Valuable &

Environmentally unfriendly

Crude oil

of

1 bbl

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Figure 1-1 Oil Fields in Kuwait Figure 1-2 Oil Drilling

Figure 1-3 Partnership Agreement

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Figure 1-4 Products from a barrel

of crude oil (in gallons)

1 barrel = 42 US gal ≈ 160 liters

Figure 1-5 Drake Oil Well 1859 (Oil Creek,

near Titusville, Pennsylvania)

Edwin L. Drake, right, stands with friend Peter

Wilson of Titusville, Pennsylvania, at the

drilling site – but not the original derrick – of

America’s first commercial oil well of 1859.

From the Drake Well Museum collection.

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Figure 1-6: Lower Pioneer Run wells along Oil Creek, USA in early 1860s

Figure 1-7: Modern Refinery

Petroleum Refining – Chapter 01: Introduction

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Figure 1-8 Another view inside a petroleum refinery

Figure 1-9 Process units in a petroleum refinery

Figure 1-10 Process units in a petroleum refinery

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Figure 1-11: Refinery tank farm

Figure 1-12: LPG storage tank

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Figure 1-13: Early oil Transportation

Figure 1-14: Ship loading facilities

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Figure 1-15: LPG tanker

Petroleum Refining – Chapter 01: Introduction

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Figure 1-16 Purpose of Refining

Prof. Tareq A. Albahri 2018 Kuwait University Chem. Eng. Dep.

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Figure 1-17 Overall view of a modern refinery.