Kuwait to Sign China/Total Deal, Boost Capacity
OREANDA-NEWS. February 06, 2012. Gulf OPEC producer Kuwait is pumping near flat-out, but has ambitious plans to expand production and boost refining operations at home and abroad, the chief of Kuwait Petroleum Corp said.
On the refining front, KPC is already involved in a joint venture with China's Sinopec, and has now brought in France's Total as a minority partner in the USD 9 billion project.
"They have accepted and we are advancing on an MoU now," KPC chief executive Farouk al-Zanki told reporters on the sidelines of an oil conference. "We are in the process of signing."
Industry sources said the stake was likely to be in the region of 20 percent.
KPC and Chinese refiner Sinopec Corp are equal partners in a project to build a 300,000 barrel per day (bpd) refinery and 1 million tonne-per-year ethylene complex in the southern city of Zhanjiang.
Kuwait also has plans to build a 200,000 bpd facility in Vietnam. It is targeting these emerging markets to secure a reliable outlet for its heavy crude oil.
In 2009, KPC courted potential investors Royal Dutch Shell and U.S.-based Dow Chemical to help fund the project but neither joined up.
The OPEC producer plans to tap its heavy oil reserves - and newly discovered reservoirs - as part of a plan to boost capacity by 1 million bpd to 4 million bpd by 2020.
For now, however, Kuwait is producing near its full capacity and would find it difficult to increase production or honour requests for additional crude, Zanki said.
The KPC chief said Kuwait is pumping about 2.9 million bpd versus full capacity of just over 3 million bpd, including its portion of the neutral zone which it shares with Saudi Arabia.
Asked what would happen if customers requested additional crude supply, Zanki said: "It would be difficult to do that on a sustainable basis, we will remain where we are."
Kuwait's primary aim is to maintain its existing capacity, mainly through enhanced oil recovery.