December 2017

HP Top Project Awards 2017

Details on high-impact refining and petrochemical projects presently under construction, as chosen by HP editors and readers

The global hydrocarbon processing industry (HPI) continues to expand and modernize to efficiently meet growing demand for energy, transportation fuels and petrochemicals.

Nichols, Lee, Hydrocarbon Processing Staff

The global hydrocarbon processing industry (HPI) continues to expand and modernize to efficiently meet growing demand for energy, transportation fuels and petrochemicals. At present, Hydrocarbon Processing’s Construction Boxscore Database is tracking more than $1.88 T in active projects around the world. These investments include projects that have been announced or are in the planning, engineering or construction phases.

The editors of Hydrocarbon Processing have identified nine projects that will contribute significantly to the expansion of the HPI, whether through contributing capital expenditures, satisfying or increasing domestic or regional demand, diversifying product offerings or adding to the resurgence in refining and/or petrochemical processing capacity.

These nine projects span the globe and represent more than $114 B in total capital expenditures. Each year, Hydrocarbon Processing recognizes the top refining and petrochemical projects that will have the greatest effect on the downstream processing industry. The winners of this prestigious award over the last three years include:

  • Refining

0  2014—Saudi Aramco and Total Refining and Petrochemical Co.’s (SATORP’s) Jubail Refinery

0  2015—SOCAR’s Turkey Aegean Refinery (STAR)

0  2016—KNPC’s Clean Fuels Project

  • Petrochemicals

0  2014—Saudi Aramco and Dow Chemical’s SADARA Petrochemical Complex

0  2015—Sasol’s Ethane Cracker and Derivatives Complex

0  2016—Dow Chemical’s Oyster Creek PDH Unit Project.

This year’s refining nominees represent nearly 2 MMbpd of new refining capacity that will begin operations by the early 2020s. These projects represent a total capital investment of more than $54 B. The five petrochemical nominees have a total cost of nearly $60 B and represent more than 36 MMtpy of additional petrochemicals production capacity by the early 2020s.

Over the past two months, thousands of Hydrocarbon Processing readers voted online to select the top refining and petrochemical projects of 2017. The following sections present the results of the readers’ poll and details of the Top Project winners and nominees’ projects.

REFINING

KNPC AL-ZOUR REFINERY, AL-ZOUR, KUWAIT—WINNER

As part of Kuwait’s 2030 Strategy, the country is focusing its efforts on two capital-intensive mega projects. Domestic consumption has been rising steadily due to increased petroleum-fired electricity generation. Rising demand and a failing infrastructure have prompted Kuwait to develop the Clean Fuels Project (CFP)—winner of the Top Refining project in 2016—and the New Refinery Project (NRP)—known as the Al-Zour grassroots refinery.

Once completed, the $16-B, 615-Mbpd Al-Zour refinery will be the largest refinery in the Middle East. The facility will process heavy Kuwaiti crude oil, supply the country’s power generation plants with environmentally friendly fuel and provide alternatives to gas imports for heavy fuel use. The project consists of five separate construction packages. These packages include:

  • Package 1—Main processing units
  • Package 2—Secondary processing units
  • Package 3—Utilities and offsites
  • Package 4—Tank farm
  • Package 5—Marine and export facilities.

The project will increase the country’s domestic refining capacity to 1.4 MMbpd, improve emissions levels in the country, produce 225 Mbpd of low-sulfur fuel oil to meet the growing demand for low-sulfur fuel oil used in power generation, produce 340 Mbpd of various export products (e.g., ULSD, ULS kerosine, petrochemical naphtha and LPG), contribute to economic growth and development, and create job opportunities for Kuwaiti nationals. The complex will also be instrumental in supplying the necessary propane and naphtha feedstocks to the $8-B Olefins 3-Aromatics 2 complex.

The project is scheduled to begin operations in late 2019. With the construction of the Al-Zour refinery and the CFP, Kuwait is set to become the largest producer of clean fuels in the Middle East by the end of the decade.

Owner/operator: Kuwait National Petroleum Corp. (KNPC)/KBRC (operator)
EPC: Fluor, Daewoo E&C, Hyundai Heavy Industries, Essar Projects, Saipem, Tecnicas Reunidas, Sinopec, Hanwha E&C, Hyundai E&C, SK E&C
Licensors: Chevron Lummus Global, Shell Global Solutions, Haldor Topsoe

PERSIAN GULF STAR REFINERY PROJECT, BANDAR ABBAS, IRAN

Since Western sanctions were relaxed, Iran has made great strides in developing its downstream processing infrastructure. The country is investing heavily to boost its domestic refining capacity from 1.9 MMbpd in 2016 to 3.2 MMbpd by 2020. The increase in domestic refining capacity is part of the country’s 20-yr Outlook Plan (2005–2025). Known as the Iran Project, the country’s goal is to increase refining capacity to 3.4 MMbpd by 2025. Iran plans to accomplish this ambitious goal by constructing new refineries and expanding and upgrading those already in operation.

One of the country’s first major refinery builds since Western sanctions were lifted is the Persian Gulf Star refinery. Located in Bandar Abbas, the plant will process gas condensate from the country’s South Pars field to produce Euro 4 gasoline and diesel. Iran completed Phase 1 of the refinery project in April, which enabled the country to become self-sufficient in gasoline production. Phases 2 and 3 are scheduled to be completed in 2018. With the completion of Phases 2 and 3, the country plans to begin fuel exports to the international market. Once all phases are completed, the $3.5-B plant will have a total installed capacity of 360 Mbpd.

Owner: Persian Gulf Star Oil Co. (Oil, Gas and Petrochemical Investment Co., Oil Industry Pension Fund, National Iranian Oil Refining and Distribution Co.)  
EPC: Bina-Tehran Janoob JV, Radira, Nardis
Licensors: Axens, Honeywell UOP, Haldor Topsoe

PUERTO LA CRUZ DEEP CONVERSION PROJECT, PUERTO LA CRUZ, VENEZUELA

The Puerto la Cruz deep conversion project is a significant step forward in Venezuela’s downstream processing industry. The majority of Venezuela’s refining network is unable to process the heavy and extra-heavy crude oil that is produced from the nation’s Orinoco Belt. PDVSA is investing nearly $9 B to modernize its Puerto la Cruz refinery—located 300 km east of Caracas—to process additional supplies of heavy oil into high-value refined products.

The modular-designed, deep-conversion project includes the construction of new processing units, as well. These units include the installation of a 130-Mbpd vacuum unit, a three-train sequential hydroprocessing unit, a sulfur recovery unit, auxiliary units, tanks, etc. In 2013, a consortium consisting of Hyundai E&C, Hyundai Engineering and Wison was awarded an EPC and startup contract for the project. Chiyoda, JGC Corp. and Inelectra are responsible for detailed engineering, procurement support and construction management. The project is scheduled to be completed in mid-2018.

Owner: PDVSA  
EPC: Hyundai E&C, Hyundai Engineering Co., Wison Engineering Ltd., Chiyoda, JGC Corp., Inelectra  
Licensor: PDVSA Intevep

DAYUSHAN ISLAND REFINERY AND PETROCHEMICAL INTEGRATED COMPLEX PROJECT, DAYUSHAN ISLAND, CHINA

Zhejiang Petrochemical is developing China’s first privately-owned refinery. The Dayushan Island refinery and petrochemical integrated complex is being built on Dayushan Island in eastern Zhejiang province near the ports of Ningbo and Shanghai. The company is constructing an 800-Mbpd refinery and a 2.8-MMtpy petrochemical integrated complex. The $25-B mega project will be built in two phases. Both phases will include the construction of a 400-Mbpd refinery and a 1.4-MMtpy ethylene plant.

Although China’s transportation fuel market is oversupplied, the country’s demand for petrochemicals is rising steadily, and the country’s producers cannot satisfy demand. The project was designed by China Huanqiu Contracting and Engineering Corp. and Sinopec’s Luoyang Petrochemical Engineering Crop. Phase 1 is scheduled to be completed in 4Q 2018, with Phase 2 beginning operations by 2021. Not only will the facility be one of the largest downstream processing facilities in the world, but it may also be the genesis of China’s initiative to drive more private investment into the country.

Owner: Zhejiang Petrochemical 

PETROCHEMICAL

ZAPSIBNEFTEKHIM PETROCHEMICAL COMPLEX (ZAPSIB-2) PROJECT, TOBOLSK, RUSSIA

ZapSibNeftekhim, a subsidiary of Russian petrochemical producer Sibur, is developing its integrated ZapSibNeftekhim Petrochemical Complex (ZapSib-2). Located 3 km north of Sibur’s polymer site at Tobolsk, the $9.5-B project will be the largest integrated complex for the production of polymers in Russia once completed.

The complex will process byproducts of oil and gas extracted from Western Siberian operations, as well as reduce the need for imports of value-added petrochemical products in Russia. The plant will integrate a steam cracker for the production of ethylene, propylene and butane-butylene fraction (BBF), and will include polyethylene (PE) units and a polypropylene (PP) unit. The stream cracker will have a processing capacity of 1.5 MMtpy of ethylene, 500 Mtpy of propylene and 100 Mtpy of BFF, along with four units with a total capacity to produce 1.5 MMtpy of various grades of PE and 500 Mtpy of PP.

Most of the onsite preparations have been completed, and major contracts have been awarded. FEED services for the ethylene plant were performed by Linde, while the FEED for the PE and PP units were conducted by Technip and ThyssenKrupp Uhde, respectively. The general design contractor for the project is VNIPIneft, while NIPIgaspererabotka, a subsidiary of Sibur, has been contracted to design the utilities, infrastructure and offsites. Technology licensing contracts were awarded to Linde, INEOS Technologies and LyondellBasell. Linde will provide processing technology for the ethylene plant. INEOS Technologies will provide its proprietary Innovene G and Innovene S processes for the manufacture of linear low-density and high-density PE. The plants will produce the full range of Ziegler monomodal, Ziegler bimodal, chromium and metallocene products for both Russian and export markets. LyondellBasell will provide its Spheripol process technology for the complex’s PP plant.

The complex is expected to begin operations by 2020/2021.

Owner/operator: ZapSibNeftekhim (subsidiary of Sibur)  
FEED: Linde, Technip, ThyssenKrupp
Licensors: Linde, INEOS Technologies, LyondellBasell

PETRONAS PENGERANG INTEGRATED COMPLEX (PIC), PENGERANG, JOHOR, MALAYSIA—WINNER

Under the country’s Economic Transformation Program (ETP), PETRONAS has embarked on the single-largest oil and gas downstream investment in Malaysia. The project will develop the Pengerang Integrated Complex (PIC), which is a fully integrated refinery and petrochemical development located in Pengerang in the southern state of Johor, Malaysia.

PETRONAS’ PIC development consists of a 300-Mbpd refinery to produce petroleum products, naphta and liquefied petroleum gas (LPG), as well as a steam cracker capable of producing nearly 1.3 MMtpy of ethylene, 1.36 MMtpy of propylene, 180 Mtpy of butadiene and 890 Mtpy of raffinate-2, which provides the main feedstock to the petrochemical plants.

With the aim to capitalize on the growing need for petrochemical products in Asia in the next 20 yr, PETRONAS’ PIC petrochemical plants are designed to produce a variety of premium differentiated speciality chemicals. Upon completion, PETRONAS’ PIC will be operating four petrochemical manufacturing plants. These plants will produce 900 Mtpy of polypropylene (PP), 740 Mtpy of monoethylene glycol (MEG), 400 Mtpy of flexible high-density polyethylene (Flexi-HDPE), 350 Mtpy of linear low density polyethylene (LLDPE) and 250 Mtpy of isononanol (INA).

LyondellBasell is providing the technology for the PP and Flexi-HDPE plants. Ineos is the licensor for the LLDPE plant and Shell has been selected for the ethylene oxide/ethylene glycol (EO/EG) plant. PETRONAS has awarded two consortiums to undertake the engineering, procurement, construction and commissioning (EPCC) for the petrochemical plants.

PETRONAS’ PIC is poised for overall startup in early 2019.

Owner/operator: PETRONAS, through its petrochemical subsidiary PETRONAS Chemicals Group Berhad
EPC: Tecnimont SpA.-Huanqiu Contracting and Engineering Corp.-TecnimontHQC Sdn. Bhd.-TecnimontHQC S.c.a.r.l. consortium, and Samsung Engineering Co. Ltd.-Samsung C&T Corp.-Samsung Engineering Sdn. Bhd. consortium  
Licensors: LyondellBasell, Ineos, Shell

RESIDUE UPGRADING AND OLEFIN DOWNSTREAM COMPLEX PROJECT, ULSAN, SOUTH KOREA

South Korea’s downstream focus has been on refining and petrochemical integration. The most capital-intensive project is the S-Oil’s Residue Upgrading Complex (RUC) and Olefin Downstream Complex (ODC) project. The $4.5-B project will be built at the company’s 669-Mbpd Ulsan refinery. The project’s scope includes the modernization and expansion of the refinery’s processing units to convert heavy hydrocarbons into high-value fuels and olefins. The RUC will produce raw materials that will feed into the 705-Mtpy ODC. The ODC will process this material to produce 300 Mtpy of propylene oxide (PO) and 405 Mtpy of PP.

Axens was awarded a contract to supply several proprietary technologies to the RUC. These units include an atmospheric residue desulfurization unit, a high-severity FCCU, an LPG sweetening unit, an MTBE unit and a butane isomerization unit, among others. A consortium comprised of Daelim Industrial Co. Ltd. and Daewoo E&C will build the ODC. The RUC/ODC project is scheduled to begin operations in 1H 2018.

Owner/operator: S-Oil  
EPC: Daewoo Industrial Co. Ltd., Daewoo E&C 
Licensor:
Axens

LIWA PLASTICS INDUSTRIES COMPLEX PROJECT, SOHAR, OMAN

Oman is investing more than $14 B in new downstream infrastructure. These investments will help diversify the nation’s products portfolio—a major initiative of many Middle Eastern nations—and accomplish a major pillar of its Vision 2020 plan. The country’s Vision 2020 plan calls for the diversification of Oman’s economy, which includes developing its downstream refining and petrochemical sectors.

One of the country’s major downstream projects is the LIWA Plastics Industries Complex project. Located in Sohar, the $6.5-B facility will receive feedstock from the recently completed Sohar refinery, as well as from a new NGL extraction plant to be built in the Fahud gas field located approximately 330 km south of Sohar. The LIWA complex will consist of an 800-Mtpy steam cracker, HDPE and LLDPE plants, a 300-Mtpy PP plant, MTBE and pygas units and additional processing units.

The steam cracker and associated facilities are being built by CB&I and CTCI. Tecnimont SpA, a subsidiary of Maire Tecnimont, will build the PE and PP plants. Mitsui and GS E&C will build an NGL extraction plant at the Fahud gas field in western Oman. The Fahud NGL extraction station will extract NGLs from produced natural gas, which will be used as feedstock for the LIWA complex. Punj Lloyd is the main contractor for the construction of the 330-km pipeline that will transport the NGL from the Fahud gas field to Sohar.

Ethylene and MTBE technologies for the LIWA facility are being provided by CB&I. The PP and PE plants will utilize technology from LyondellBasell and Univation Technologies, respectively. Axens will provide its proprietary technology for the plant’s pygas unit.

The LIWA project is scheduled to be completed in 2019. Once completed, the facility will be instrumental in increasing ORPIC’s PE and PP production to 1.4 MMtpy.

Owner/operator: Oman Oil Refineries and Petroleum Industries (ORPIC)  
EPC: CB&I, CTCI, Tecnimont SpA, Mitsui, GS E&C, Punj Lloyd  
Licensors: CB&I, Axens, LyondellBasell, Univation Technologies

MOKRAN PETROCHEMICAL COMPLEX PROJECT, CHABAHAR, IRAN

Iran is seeking to invest approximately $60 B to nearly triple its petrochemical production. The ambitious plan includes the construction of 25 projects to boost domestic petrochemical production capacity from 60 MMtpy in 2017 to 160 MMtpy by 2025. The country’s most ambitious petrochemical project is the Mokran petrochemical complex in Chabahar.

The nearly $12-B complex will consist of two olefin plants, an aromatics plant, a methanol-to-olefins (MTO) plant, a crystal melamine plant, four urea/ammonia plants, four methanol/ammonia plants and five methanol plants, as well as utilities and terminal infrastructure. The three-phase construction plan could house up to 30 downstream units, with a total production capacity of 25 MMtpy. The cost, capacity and completion data for the project are broken down below:

  • Phase 1: Total cost of $5.7 B, with completion in 2019–2020
  • Phase 2: Total cost of $2.8 B, with completion in 2021–2022
  • Phase 3: Total cost of $3.4 B, with completion in 2023–2024.

The project is being developed by Negin Mokran Development Petrochemical Co. (NMPC). According to NMPC, the company’s scope of work includes building the complex’s infrastructure, utilities, storage tanks and terminals, as well as a 1,000-km ethane pipeline to supply feedstock to the petrochemical units. The Mokran petrochemical complex will be instrumental in transforming Chabahar into Iran’s third petrochemical hub.

Owner/operator: National Petrochemical Co.  
EPC: Negin Mokran Development Petrochemical Co. HP

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