New Global Refinery Capacity Caters to High-Demand Hotspots

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Researched by Industrial Info Resources (Sugar Land, Texas)--Around the world, large-scale refineries are nearing completion after years in the works and are expected to bring much-needed refined product supply to market. "Western Asia and Africa are among the regions ramping up refined product production, amid growing demand and global distillate tightening. This contrasts with regions like North America and Europe, where refinery projects are focused on ESG and alternative-fuel development," said Hillary Stevenson, Senior Director, Energy Market Intelligence for Industrial Info.



At least two world-scale refinery projects are nearing completion: Dangote Industries Limited's Lekki Refinery in Nigeria, and Kuwait Integrated Petroleum Industries Company's (KIPIC) Mina Al Zour Refinery in Kuwait.

Dangote Industries is performing a test run on the crude distillation unit at its new, 650,000-barrel-per-day (BBL/d) refinery. Expectations are to begin commercial operations at the unit by April 15 (previously reported March 15). The project kicked off in 2018 and has seen its completion date pushed back a total of 38 months in the meantime. Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database can click here for a list of detailed project reports for the Dangote refinery, and click here for a plant profile.

The Dangote refinery will comprise a single crude train, which could make the plant vulnerable to failure should issues arise.

Africa has more planned refineries than any other continent: four in construction, two engineered and 35 planned. Crude exported from West Africa goes to Europe and the U.S. East Coast. The new refinery in Africa will consume up to 650,000 BBL/d of African crude, which will reduce the amount of African crude available for export to the rest of the world. But Nigeria's government may throttle the utilization, depending on the profitability of exporting crude when compared with producing refined products.

Alongside Dangote, Industrial Info is tracking three smaller African refineries under construction, with a total capacity of 80,000 BBL/d:


KIPIC's 615,000-BBL/d Mina Al Zour Refinery in Kuwait also is nearing completion. KIPIC started commercial production at several units in early March, including the 205,000-BBL/d CDU 2. The 205,000-BBL/d CDU 1 began operations in fourth-quarter 2022; the project as a whole kicked off in 2016 and slipped 88 months.

Commercial start-up of the third and last 205,000-BBL/d unit is expected in third-quarter 2023. The Mina Al Zour Refinery will use feedstock from within Kuwait to make refined products. This will decrease Kuwait's crude oil export capacity to the world. Subscribers can click here for a list of detailed project reports for the Mina Al Zour Refinery, and click here for a plant profile.

Like Dangote, the Mina Al Zour Refinery has been long-awaited. But unlike Dangote, the Kuwait refinery has three crude trains. The multiple trains allowed KIPIC to ramp up production as the first two were completed, allowing KIPIC to switch crude feedstocks based on economic factors. The three trains also reduce risk, allowing the refinery to continue producing refined products if one unit is down for maintenance or encounters unplanned issues.

Two other refineries are under construction in Western Asia, with a total capacity of 370,000 BBL/d: the Karbala Refinery in Iraq and the Duqm Refinery in Oman. In terms of planned refineries, Western Asia is the second-biggest region with 17 refineries planned and one engineered.

Including Dangote and Mina Al Zour, Industrial Info is tracking 2.53 million BBL/d of refining capacity under construction globally, at 15 plants.



These new refineries will help to replace capacity lost from refinery closures in the past and crude unit closures expected in the future.

"We've had 50 refinery closures in recent years globally," said Trey Hamblet, Industrial Info's vice president of research for Chemical Processing and Refining, in a recent webinar. "Industrial Info's global unit database shows 29 individual crude units (nearly 1.7 million BBL/d) are expected to close. However, many are simply unit replacements, as in Russia: Four units (400,000 BBL/d) will replace the 12 units (595,700 BBL/d) planned for closure, largely replacing older, antiquated capacity originally built back in the 50's and 60's."



Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).