Kuwait to increase exports of refined petroleum products from al-Zour refinery

Kuwait will increase exports of refined petroleum products from its new al-Zour refinery in the second half of this year to make up for a shortage of petroleum products from the big producing country in Europe and meet growing demand in Asia and Africa.

The 615,000-barrel-a-day Zur refinery, one of several new refineries to come on stream globally this year, will produce more refined petroleum products after supply disruptions in refined products from the top fuel exporter, And cooling refining margins from last year's record levels.

Kuwait is increasing exports of refined petroleum products to Europe, Africa, Asia and the Americas after Western-imposed sanctions restructured global energy trade routes.

The OPEC member is expected to reduce crude oil exports and increase exports of petroleum products as two more crude distillation units are due to start up at the Zur refinery later this year to keep the Zur refinery running at full capacity, the sources said.

A person familiar with the matter told Reuters reporters that the Zur Refinery, which is designed to process medium and heavy crude oil, started up its first 205,000 barrels per day crude distillation unit in September last year. The plant is running at 70% to 80% capacity.

Kuwait’s exports of key refined products hit an all-time high of 17 million barrels in January, up 30 percent year-on-year, as the Al Zur refinery shipped more fuel oil to the Singapore Strait and more to Europe, according to data released by Kpler. Diesel and jet fuel, while more naphtha was shipped to the likes of South Korea and Japan.

Fischer Global Energy (FGE) expects the second crude distillation unit at the Zur refinery to start up in March or April this year, while the third crude distillation unit could come online in August. The three crude distillation units have equal capacity.

"The full impact of the Zuhr refinery on the global oil product market is likely to be felt in the second half of 2023," said Ivan Matthews, head of refining for FGE Asia.

The al-Zour refinery is run by Kuwait Integrated Petroleum Industries, a subsidiary of Kuwait Petroleum Corporation (KPC), which did not immediately respond to a request for comment.