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Kuwait shuts 52,000-bpd Shuaiba heavy oil unit

SINGAPORE/KUWAIT - Kuwait National Petroleum Co. (KNPC) has shut a 50,000 barrels per day (bpd) heavy oil unit at its Shuaiba refinery for 3-4 weeks of unplanned maintenance, a KNPC spokesman said on Wednesday.

“It was unscheduled,” the KNPC spokesman told Reuters. He declined to give more details on what caused the shutdown. The outage would not affect the crude processing capacity of the plant, he said.

Earlier, an industry source said the outage would reduce crude runs by 20 percent to 160,000 bpd and would lead to lower naphtha and middle distillate output.

KNPC would compensate for any loss in oil product output with barrels from storage or from other refineries, the KNPC spokesman said.

Kuwait is the second-biggest naphtha supplier to Asia, exporting some 7 million tonnes per year, including about 6.5 million tonnes under term contract.

The heavy oil unit consumes fuel oil and upgrades it to naphtha and middle distillates. Kuwait was more likely to send any excess fuel oil supplies to power plants than sell it on the spot market.

The world’s seventh largest oil exporter is scheduled to hold negotiations with term lifters for August 2007-July 2008 naphtha supplies from June 8.

Some traders said the potential impact of the outage on the already tight Asian naphtha market was small. The Shuaiba plant produces less of the petrochemical feedstock than two other refineries operated by KNPC.

OPEC member Kuwait has three domestic refineries with total crude processing capacity of 930,000 bpd.

The Shuaiba refinery produces light, medium and heavy products, including gas, naphtha, gasoline, kerosene, fuel oil and diesel. Most of the products are exported.

Kuwait has planned to close the ageing Shuaiba plant if it goes ahead with the new 615,000 bpd al-Zour refinery.

Kuwait was forced to double its estimated budget for that plant, which would be the biggest in the Middle East, to $12 billion earlier this month due to soaring industry costs.