Khalid Al-Mushelaih:KNPC investments worth KD11 bln

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KPC WORLDIn This Issue

Quarterly Magazine Issue No. 65, July 2013

Correspondence:P.O. Box: 26565, 13126 Safat, Kuwait

Fax: (965) 24994991Website: www.kpc.com.kwEmail: media@kpc.com.kw

Kuwait Petroleum Corporation (KPC), fully owned by the State of Kuwait, is one of the world’s major oil and gas companies. It is focused on petroleum exploration and production, refining, marketing, petrochemical production & sales and transport. KPC’s mission is to manage and operate these integrated activities worldwide in an efficient and professional manner. In addition, KPC is committed to growing shareholder value, while ensuring the optimum exploitation of Kuwait’s hydrocarbon resources. KPC has an important role in contributing to the development of the Kuwaiti economy, developing a national workforce, maintaining superior commercial and technical expertise, and pro-actively managing the environmental, health, and safety aspects of KPC’s businesses.

KPC Mission

Motlaq Al-Azmi: Al-Shuaiba Refinery is the world’s first Hydrogen refinery using hydrogen extracted from gas

Saad Al-Ajmi:The scarcity of feed in Kuwait is a big challenge while com-peting with its counterparts

Dr. Naji Al-Mutairi:KISR has distinguished relations with the Kuwaiti oil sector

Dhuha Al-Remaidheen: The crude oil desalinating unit is in charge of refining operations and extracting oil distillates

Editorial

Talal Al-Khalid Al-SabahChairman of KOTC’s board of directors,

Managing Director of Governmental, Parliamentary, Public and Media Relations

I would like to extend my sincere congratulations to the new Chief Executive Officer of KPC on the trust which HH the Amir has placed in him to occupy such position which is considered one of the most important positions in Kuwait because it is connected to the pillar of our national economy.I would like also to congratulate the new managing directors hoping them to achieve success and progress in their new positions. Definitely, we cannot forget to appreciate and thank the former Chief Executive Officer and the former managing directors for their devoted efforts they exerted to develop the oil sector.I’d like to take the opportunity to also congratulate the employees of the oil sector on the advent of the holy month of Ramadan, entreating Allah, the Almighty, to help them achieve the goals of the oil sector and the State of Kuwait under the new leadership that is distinguished with efficiency and ability to implement KPC’s projects and accomplish its strategic goals, while underpinning its local, regional and international status.Within the framework of underlining the status of Kuwait in the oil industry, we do not exaggerate when we say that the Kuwaiti oil sector steadily steps towards its goals. Consequently, the projects which KPC and its subsidiaries carry out are concrete evidence of such devoted efforts put forth in this domain. Therefore, the editorial team of KPC World Newsletter is keen on highlighting these projects which include refining projects which Kuwait National Petroleum Company undertakes to reinforce the status of this industry locally and internationally. Add to this is the environment projects which KPC has launched to preserve the Kuwaiti environment and achieve sustainability. The newsletter spotlights further a number of important topics and interviews in this regard.

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The New Structure of Kuwait Petroleum Corporation (KPC) and its Companies

Nizar M. Al-Adsani Deputy Chairman of the Board of Directors and Chief Executive officer KPC

Nabil Bouresli

Sheikh Talal Al-Khalid Al-Sabah

Mohammed Al-Farhoud

Bader A-Sharrad

KPC’s Managing DirectorsManaging Director of International Marketing

Managing Director of Governmental, Parliamentary, Public & Media Relations

Managing Director of Planning and Finance

Managing Director of Administrative and Training Affairs

Nizar M. Al-Adsani

Nabil Bouresli Sheikh Talal Al-Khalid Al-Sabah Mohammed Al-Farhoud Bader A-Sharrad

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Oil Companies’ Managing Directors

The Oil Companies’ Chairmen of Board of Directors

Hashim HashimManaging Director

of KOC

Mohammed Al-MutairiManaging Director

of KNPC

Asad Al-Sa’adManaging Director

of PIC

Ahmad BehbehaniManaging Director

of KOTC

Bakhet Al-RashidiManaging Director

of KPI

Sheikh Nawaf Al-SabahManaging Director

of KUFPEC

Ali Al-ShimmariManaging Director

of KGOC

Ali Al-ObeidManaging Director

of OSSC

Nabil BouresliChairman of KOC’s board of directors

Asad Al-Sa’adChairman of KNPC’s

board of directors

Mohammed Al-FarhoudChairman of PIC’s board

of directors

Sheikh Talal Al-Khalid Al-SabahChairman of KOTC’s

board of directors

Mohammed Al-MutairiChairman of KPC Holdings Aruba

Sanad Al-SanadChairman of KUFPEC’s

board of directors

Mohammed Sayed AbdulwahabChairman of KGOC’s

board of directors

Mefreh Al-ShimmariChairman of OSSC’s

board of directors

Fouad Al-AbasiChairman of KAFCO’s

board of directors

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Khalid Al-Mushelaih:KNPC investments worth KD11 bln

Globally the refining industry is faced by a wide range of challenges due to the rising demand for high quality petroleum products; a decline in light crude oil production and indications of an increase in heavy oil production. This has necessitated the development of refineries and the establishment of new ones to refine heavy oil for producing light products that are strongly needed by the market.

To learn more about the Kuwaiti re-fining industry and the challenges it faces, 'KPC World' met Khaled Al-Mushaileh, Manager Corporate Planning KNPC, who said: “It is absolutely necessary for every in-dustry, including the oil refining industry, to identify future chal-lenges in order to assess the strate-gic plans to develop the industry.”

Al Mushaileh briefed 'KPC World' on the most important challenges facing the oil refining industry, on the global as well as regional level by highlighting the following:

The expected changes in the composition and specifications of crude oil .

Changes in the demand for pe-troleum products as well as the expected changes in their specifi-cations in accordance with the in-ternational environmental require-ments.

Meeting the needs of the local market of petroleum products.

The need to overcome the envi-ronmentally harmful emissions.

In light of these challenges, oil refining companies develop their strategies and identify the nec-essary investments for expand-ing the refining capacity, adding further manufacturing units or modernizing the existing pro-

duction units of its refineries. With regard to the strategic plans developed to meet the refining chal-lenges, Al-Mushaileh explained that after prospecting the future until 2030, KPC has developed and updated the general strategic aims of the Corporation and its compa-nies, thus the strategic objectives of the local refining industry have been developed to:

Meet the requirements of the growing needs of the local mar-ket for fuels, whether for power generation or for different means of transportation, according to the required quantities and specifica-tions.

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Challenges of refining industry urge us to develop our

strategy and allot our investments

Increase the refining capacity in Kuwait to reach about 1.4 million bpd over the medium term; and to 1.6 million barrels per day over the long term to meet the local energy requirements.

Expand the operational capacity to handle gas in order to accom-modate the steady increase in the quantities of gas and condensates expected to be produced in the fu-ture from the oil and gas fields, and in order to produce liquefied petro-leum gas.

Achieve the highest level in crude oil manufacturing capac-ity to produce high quality light products, in local refineries and to maximize the economic return, taking into account the local needs of energy.

Maximize the discharge of Ku-waiti heavy oils in the local refiner-ies, so as to achieve the maximum possible economic benefit of these kinds of low priced oils in the in-ternational markets.

Achieve the optimum integra-tion between the refining and pet-rochemical operations on the local level to maximize the economic re-turn of the oil sector.

KNPC has conducted a num-ber of feasibility studies for a range of proposed major proj-ects. Future investments have also been identified so that KNPC can achieve its strategic goals. About the size of these invest-ments in future major projects, Al-Mushaileh clarified: “The total expected investment is estimated at KD 11 billion for the implementa-tion of a number of capital projects, notably the new refinery project, which is estimated to cost about KD 4 billion, and the environmen-tal fuel project with a cost of KD

4.68 billion. This is in addition to a number of other notable projects including:

- The fourth pipeline gas project, fifth line gas project for the produc-tion of liquefied petroleum gas.

- The construction of new reser-voirs of liquefied natural gas in Mina Al-Ahmadi refinery.

- The construction of permanent fa-cilities to import liquefied natural gas.

- The expansion of Al-Ahmadi res-ervoirs project for petroleum prod-ucts.

- The construction of a new store for petroleum products in Al-Mitla’a area.

The project of establishing a new unit to deal with acidic gases at the Ahmadi refinery” Al-Mushaileh pointed out: “The objective of these investments is to

achieve KPC’s strategic guidelines, which mainly aim at meeting the future fuel requirements of the lo-cal market in Kuwait, whether for power generation or for transporta-tion.” Also, these investments will improve both the products’ qual-ity and the manufacturing ability to increase competitiveness in the international market and achieve the highest possible economic re-turns for refining operations. This will also improve the level of en-vironmental performance and align them with local and interna-tional environmental requirements. On the developments of both the environmental fuel project and new refinery, Al-Mushaileh said: “Two contracts have been signed for the provision of advisory ser-vices for the management of both projects. In addition, a contract worth an estimated KD 38 million was signed on 6 January, 2013 with Korea's Samsung Company to pre-pare the site for the environmental fuel project. This contract includes preparations for the two project sites located in Mina Abdullah and Mina Al-Ahmadi refinery. The im-plementation period of the contract is 18 months, including the estab-lishment of temporary facilities for the site, sanitation and roads,

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protective wall, security facilities and administrative offices.” On the issue of the new refinery project, Al-Mushaileh added, “We are cur-rently working on the implemen-tation of preparatory work studies for the project site, including the topographic surveys, soil testing, marine survey and examination, conducted by AMEC (one of the world’s leading engineering, proj-ect management and consultancy companies).

Al-Mushaileh went on to say that the Public Authority for Industry had finally agreed on allowing the contractors to store materials and heavy equipment for environmen-tal fuel project, in the area of west-ern Mina Abdullah due to the lack of land within Al-Ahmadi refinery. This step is important to enable contractors to implement the proj-ect on time.

He went on to name some of the other key investment projects of KNPC, including the one for han-dling gas and condensates; the pro-duction and storage of liquefied petroleum gas, petroleum products warehouses projects, and the es-tablishment of permanent facilities project to import liquefied natural gas. He stressed that the fourth unit project for producing liquefied pe-troleum gas is a key project, which aims at handling gas and conden-sates from oil and gas fields, and converting them into liquefied gas-es for export, as well as separating methane and ethane. The capacity of the project is 805 million cubic feet of gas per day and 106,000 barrels of condensates per day, at an estimated cost of KD 315 mil-lion. “In addition to this project, we have completed the engineer-ing studies for the fifth unit of the liquefied petroleum gas produc-tion, a project which is similar to the fourth unit. This unit has been

approved based on new develop-ment plans to explore for gas in the oil and gas fields and expec-tations of increased production of gas and condensates in the future.” This also includes the construction of 10 new reservoirs to store pro-pane and butane gas (LNG); these special reservoirs have different specifications and capacity from those for the storage of petroleum products such as gasoline and die-sel, naphtha and others. The project implementation has been contract-ed to GS, a Korean Engineering and Construction Corporation. Al-Mushaileh explained that KNPC will implement two new projects, one for the expansion of Al-Ahmadi’s warehouse for petro-leum products, and the other for the construction of a new warehouse at Al-Mitla’a area. These projects come within the framework of rec-ommendations following signifi-cant studies on future prospects of strategic demand for products in

the local market until 2030, which was completed in collaboration with a working group of Kuwait Oil Tanker Company (KOTC), and International Marketing at KPC.

Al-Mushaileh made it clear that KNPC, in order to face the grow-ing demand of the local market for petroleum products, is currently working on the renovation and ex-pansion of Al-Ahmadi storage res-ervoirs at an estimated cost of KD 68.5 million. This project includes the establishment of 11 new reser-voirs, with loading piers at Al-Ah-madi reservoirs. Another approved project is the establishment of a new warehouse at Al-Mitla’a area. This is considered one of the strategic projects in Kuwait as it is designed to meet the growing demand for pe-troleum products in the local mar-ket. This project corresponds with the development plan of the state that includes a number of mega-projects such as the Silk City, and development of Al-Mitla’a area. Al-Mushaileh alluded that KNPC chose Al-Mitla’a to implement the project, because Al-Ahmadi area is using Ahmadi reservoirs, while the central region is using Subhan reservoirs; therefore the new warehouse in Al-Mitla’a will serve a wide area in the north un-

KPC strategic directions are aimed to meet the local market’s

future requirements from petrol

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der the urbanization and industrial development plans envisioned by the government for the future. This project includes the establishment of 23 tanks for petroleum products, mainly to store gasoline and diesel products, in addition to the three pipe lines to transport products from the KNPC’s refineries to Al-Mitla’a area.

The feasibility study and some pre-liminary work have been complet-ed. The project is estimated to cost around KD 258 million, and the pre-liminary engineering design phase of the project will begin this year. With regard to the construction of permanent facilities to import liq-uefied natural gas, Al-Mushaileh said: “I wish to refer to the impor-tance of importing natural gas for the State of Kuwait, in the light of the increasing demand for using it in generating electricity during the summer months, a period when huge quantities of crude oil are cur-rently being consumed by power plants.

Noting that temporary facili-ties for importing natural gas has been available for a number of years, Al-Mushaileh added that it has proven its success both eco-nomically and environmentally. And on the study of future energy needs in cooperation with KPC, Al-Mushaileh said that there was a need to import natural gas perma-nently, which requires the presence of permanent facilities.

The study of the project is in two parts: the first is marketing, which is concerned with importation, quantities and expected prices; the other part is technical, which fo-cuses on the most appropriate tech-nical and strategic sites. KPC has implemented the marketing part since it is specialized in that aspect;

while KNPC has carried out the technical side to answer questions on how to build the port, select the site and technology to be used. “I was honored to be the team lead-er for the detailed technical feasi-bility study to choose the best sites and technology for this strategic facility. The Group was organized in early 2012 and it includes sev-eral experts and qualified cadres representing Al- Ahmadi refinery, KNPC Projects’ Department, KP-CIM, representatives from the Ku-wait Oil Company (KOC), and of-ficials of the supply of gas for the local market and power stations, as well as officials from ports export-ing petroleum. The technical part of the study began in August 2012, while the final report was submitted in mid-December. The scope of the study included identifying the best

technology and the best site in terms of risk and cost. It was deduced that Al-Zour is the best site from a stra-tegic viewpoint with the possibility to take advantage of the integra-tion with the new refinery project. He pointed out that the scope of the project includes the creation of complete facilities to receive the quantities of unloaded imported gas from ships into the reservoirs and then convert them into gases in the evaporation facilities to be pumped in the pipes of the Minis-try of Electricity. The first phase in-cludes the construction and imple-mentation of 4 reservoirs that meet the required energy demands in the first phase, which is 1,300 million cubic feet per day. Based on stud-ies of future energy needs, the plan allows for future expansions in the second phase of the project (ex-pected to be 3,000 million cubic feet per day). The estimated initial cost of the project is estimated at KD 350 million. In the meantime, the preliminary engineering de-sign work will start, and before the implementation of the project nec-essary approvals will be obtained, while the completion is expected to be in 2019-2020.

The Fourth Unit project of producing LPG

aimed to treat gases and condensates which are extracted from fields of

gas and oil

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Motlaq Al-Azmi: Al-Shuaiba Refinery is the world’s first Hydrogen refinery using hydrogen extracted from gas

Its refining capacity is 200,000 bpd

The refinery, which was es-tablished in 1966 on an area of 1,332,000 square meters, soon reached a productivity of 95,000 bpd. It was built in two years; thus, the official inauguration was in April, 1968. After one month, Kuwait National Petroleum Company (KNPC) exported its first production from the refinery to Japan and other countries. Due to the incessant need for oil dis-

tillates, KNPC performed some expansion activities in 1975 to increase production to 180,000 bpd. Over the years production has kept increasing and the re-finery currently has a production capacity of 200,000 bpd.

To learn more about the refinery and its substantial role in the Ku-waiti refining industry, KPC World Newsletter interviewed Motlaq Rashid Al-Azmi, Deputy Manag-

ing Director of Al-Shuaiba Refin-ery, who said Al-Shuaiba Refinery is considered the first of its kind in the world to utilize hydrogen extracted from natural gas to run its process units. This system is capable of handling crude oil with high sulfur content, as hydrogen is one of the key elements used to remove or reduce the percentage of sulfur and nitrogen impurities and increase the quality as per in-ternational specifications.

Refining industry is considered the backbone and key support of the oil industry in producing countries like Kuwait. This industry has witnessed remarkable development in the last two decades thanks to the continuous modern technological developments all over the world. With an increase in price of refined pe-troleum substances, compared to the prices of crude oil, the profits of the Kuwaiti refineries have improved substantially, especially that of Al-Shuaiba Refinery, which spares no effort to achieve the utmost possible integration in its hydrocarbon operations. In fact, Al-Shuaiba Refinery has one of the largest capabilities, relative to other refineries in the world, enabling it to achieve outstanding profits.

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Al-Azmi clarified that the refin-ery produces several petroleum distillates such as light, middle and heavy distillates of high qual-ity that meets international speci-fications. The refinery is noted for its hydrogen cracking system, which was applied at the time of establishing it. It produces other products such as the natural gas, naphtha, octane, kerosene, jet fuel, diesel oil and fuel oil, be-sides the sulfur that is produced on the sidelines of the manufac-turing processes. Al-Shuaiba re-finery plays an important role in providing petroleum products to the local market; however a large part of its production is exported to the international markets as its products are of high quality and conforms to international stan-dards established in this domain. He added that the refinery in-cludes four major departments: Operation Department, Qual-

ity Control Department, Tech-nical Service Department and Maintenance Department, which includes several important sec-tions.

Environmental Achievement

With reference to the environ-mental side in the refinery’s op-erations, Al-Azmi said KNPC is considered one of the few oil companies that have launched en-vironment initiatives to comply with international environmen-tal standards in its operations. He indicated that the company

has successfully received ISO 14001:2004 certification for the past eight consecutive years.

Hydrogen cracking system enables the refinery to produce different kinds of

petroleum distillates

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This, he said, reflected positively on the system implemented by the Environment Department at the refinery.

Al-Azmi further disclosed that the company is renewing the utilities engaged in biologically treating liquid waste. He added that in addition to a special sys-tem for controlling drainage to reduce the percentage of pollut-ants, KNPC has recently applied a plan to reduce the emissions of flared gas.

Saying that the refinery’s ad-ministration is keen on optimiz-ing its properties and assets, Al-Azmi said that the refinery has launched initiatives aimed at improving the utilization of its assets. In this regard, the refin-ery approved a training plan for each employee to learn how to deal with the company’s assets

and comply with the schedule of periodic maintenance for its units in order to guarantee safe opera-tions and high profitability.

Exporting petroleum products

As for the most important units in the refinery, their operational capacity and their role in produc-tion, Al-Azmi said the refinery’s production on average reaches 200,000 bpd. He went on to add that oil piers are considered one

of its most vital utilities as refined petroleum products are exported through it. The oil pier includes five berths; three of which be-long to Al-Shuaiba Refinery and the other two berths belong to Equate Company. The products are transported through pipelines each of which is three kilometers in length. However, the capabil-ity of loading at these berths de-pends on the kind of product be-ing exported.

Light products such as naphtha and petrol load at the rate of 1500 ton/hour.

Middle products such as kero-sene load at 1500 ton/hour.

Heavy products such as fuel oil load at 2000 ton/hour.

The refinery’s vital unit groups and their productivity are as follows:

We apply special system to monitor drainage

water and identify the percentage of pollutants

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A unit for distilling crude oil with productivity of 200,000 bar-rel.

Three units for producing hy-drogen with capacity of 222 mil-lion cubic feet.

A unit for improving petrol with capacity of 15,800 bpd.

A unit for hydrogen cracking “ISO cracker” with capability of 46,000 barrels.

A unit for hydrogen cracking “ISO max” of capability 54,000 barrels.

A unit for purifying naphtha with capability of 26,000 barrels.

A unit for purifying kerosene of with capability of 35,000 barrels.

A unit for purifying light diesel with capability of 17,000 barrels.

A unit for purifying heavy die-sel with capability of 12,000 bar-rels.

A unit for treating kerosene with capability of 20,000 barrels.

A unit for recovering sulfur with a capacity of 600 long tons.

A unit for treating exhaust from acidic gases at the rate of 69,216 cubic meter per hour.

A unit for removing acidic gas-es with capability of 72.2 million cubic feet.

Asked about the number of per-sonnel in the refinery, Al-Azmi clarified that the number of em-ployees in Al-Shuaiba Refinery reached about 850; in addition there were hundreds of person-nel employed by the contractors who are spread across the vari-ous departments of the refinery. He added the refinery applies strict criteria of security and safety to protect the installations as per the international criteria allotted in this regard; thereof, it won several distinguished awards and certificates, both lo-cally and internationally. It is worth mentioning that the refin-ery achieved the highest rate of points in a field survey to assess risks in 2012.

A number of initiatives are applied to keep the company’s assets and

properties

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For more information about this issue, KPC World Newsletter in-terviewed Saad Al-Ajmi, Deputy Managing Director of Adminis-trative and Financial Affairs at PIC, who emphasized the fact that the Arabian Gulf area oc-cupies a pioneering status in the petrochemical industry as it is rich with the feed which is a ba-sic component for this industry. Therefore, it is considered one of the most important producing and exporting areas in the field of petrochemical products.

Al-Ajmi indicated the shortage in the amount of feed in Kuwait

made it exert tremendous efforts to compete on a parallel level with its counterparts in this field such as Qatar, which possesses huge quantities of gas that are used as feed in such industry.

Al-Ajmi added that PIC also dili-gently seeks to bolster its interna-tional status through conducting extensive studies on the supply and demand of products before making its decisions.

Asked if the company intends to significantly decrease the activity of fertilizer plants and provide al-ternatives, Al-Ajmi clarified that the Fertilizer Plants are run effi-

ciently in liaison with HSE orga-nization until a decision is taken to minimize this activity or relin-quish it totally in the middle term as per the strategic directions of Kuwait Petroleum Corporation.

“If PIC gives up fertilizers, it will target several other projects to in-crease its petrochemical industry such as olefins and aromatics. These projects will be executed as per a specific strategy based on three pivots. The first pivot is aimed at establishing projects tasked with providing the feed inside and outside Kuwait and the second pivot is to possess

Kuwait Petroleum Corporation’s (KPC) strategic directions stress the importance of keeping the in-dustry of fertilizers and managing it efficiently until Petrochemical Industries Company (PIC) with-draws completely from such activity in the middle term. Accordingly, the company re-assesses its activity in collaboration with KPC to take the appropriate decision in this domain.

Saad Al-Ajmi:The scarcity of feed in Kuwait is a big challenge while competing with its counterparts

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petrochemical plants outside the country; whereas the third pivot is aimed to supporting KPC’s activities inside and outside the country in this domain,” Al-Ajmi noted.

With regard to the profits expect-ed from such alternative projects, He indicated the company priori-tizes producing a number of prof-itable petrochemical products such as polypropylene, polyeth-ylene, ethylene Glycogen, Petrol, PTA and PET. In addition, it fo-cuses on producing some special-ized substances of higher margin-al profit compared to fertilizers. These products include Ethyl Amine which is used in cleaning industry, cleansing metals and treat gas; in addition to styrene-butadiene rubber which is used in the industry of tires, rubber products and shoes, besides other polyols used in producing poly-urethane and in the industry of plastics and paintings.

As for the mechanism of execut-ing Olefins III project and the steps which have been taken in this domain, he clarified that the results of the feasibility study which the company conducted in 2011 were positive and hopeful. Accordingly, the company has taken several important steps, including assessing the foreign companies with which it deals; assessing the validity of the proj-ect’s site and providing alterna-tive sites to avoid obstacles that may take place in this regard. Moreover, the company tries to identify the kind of feed which will be used in producing petro-chemical products. It also coordi-nates with Kuwait Oil Company and the Planning System at KPC to carry out the project. The com-pany is expected to soon get nec-

essary approvals from concerned authorities to start the implemen-tation of the project.

Al-Ajmi further said it was not possible to identify the total cost of the project in the current time; but the initial cost of the project is estimated to be nearly $8-9 bil-lion.

Commenting on the challenges which the Olefins III project con-fronts, Al-Ajmi said the lack of industrial land in Kuwait repre-sents a huge challenge for petro-chemical industry in the country, because any step aimed at ex-panding this industry definitely needs industrial lands. Therefore, PIC is incessantly coordinating with Public Authority for Indus-try and KPC to search for appro-

priate sites for such industry.

He added that the The dearth of the feed makes Kuwait unable to compete with other companies on the Gulf level.

With reference to China petro-chemical complex project, he pointed out that PIC cooperates with the Chinese government to initiate the project which is com-posed of two parts. The first part includes a refinery which the company will soon start estab-lishing thanks to the tremendous efforts which have been exerted to finalize the required proce-dures with the Chinese side. The second part of the project in-cludes a petrochemical complex which confronts some hindranc-es as the Chinese government perceives that the markets of the petrochemical industry are not very stable especially in China. This has led to the suspension in implementing of the project. However, PIC will not accept the project unless there are guaran-tees of its economic success.

Fertilizer Plants are run efficiently and according to HSE

criteria

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Menahi Al-Enzi:KOC strategic goals are aimed at increasing produc-tion to one billion cubic feet of non-associated gas

It produces nearly 1.35 bln cubic feet from gas daily

Kuwait Oil Company (KOC) is developing the Jurassic gas fields and carrying out a number of re-lated projects to achieve its strategic goals, which aim to increase the production of non-associated gas from Jurassic deposits in North Kuwait to one billion cubic feet. To learn more about the develop-ment plans allotted for gas fields and new projects, the budget allotted for them and the criteria of safety and environment, KPC World Newsletter interviewed Menahi Al-Enzi, Vice Chief of Gas and Exploration Directorate at KOC.

Al-Enzi began by stating that the process of increasing the rate of oil and gas production is carried out as per a clear explo-ration and production strategy based on two pivots: The first is aimed at developing the Jurassic reserves, which have been earlier explored, in order to increase the non-associated gas productivity from these reserves to one billion cubic feet by 2019 – 2020.

The second pivot centers on con-ducting new explorations to find new gas reserves in order to take production to 1.5 billion cubic feet by 2030.

Regarding the development of Jurassic gas fields, Al-Enzi said KOC is keen on achieving its short, middle and long term plans so as to provide the most appropriate solutions allotted to develop such fields and updating the technology applied in devel-

oping these wells. The company also allots programs to manage the hazards of deep wells and en-hance their performance. He in-dicated that KOC is planning to drill 12 deep development wells each year, as part of its plan to develop the Jurassic gas fields in north Kuwait. He stressed that these development operations re-quire specific technology that re-quire the company to draw up ex-tensive plans and conduct precise

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The project of developing Jurassic gas fields in Kuwait is one

of the most complicated projects technologically

and environmentally

studies. One of these plans envis-ages reducing the drilling period of each well, so as to reduce cost and improve performance.

With regard to the projects which the company will implement in the coming phase, Al-Enzi said KOC is working on expanding pipelines to feed gas to Kuwait’s power stations, as well as another project to import liquefied gas in case the local market suffers from a shortage during summer, a peri-od when electricity consumption spikes.

Meanwhile, the company has im-plemented the project of gas sta-tion number 160 in south Kuwait, which has recently been entered into service, as well as station number 180 in the south and sta-tion number 171 in the west of Kuwait. The company has also started establishing more instal-lations to increase gas production from Jurassic fields.

Asked about the company’s cur-rent production of non-associat-ed gas, he clarified that KOC’s gross production has reached 1.35 billion cubic feet daily; of this, 145 million cubic feet is of non-associated gas and about 1.2 billion cubic feet from associ-ated gas. He added the company started producing non-associated gas after it conducted several tests from explored wells and the first phase of production from 20 wells started in 2008. This initial production also enabled the com-pany to identify several charac-teristics of the reservoirs. It was found that once the utilities were established and actual production commenced, there was a differ-

ence in the results from those that were expected earlier.

On the challenges which KOC confronts while extracting gas, Al-Enzi emphasized that the project of developing the Juras-sic gas fields in Kuwait is consid-ered one of the most complicated and challenging projects, both technologically and environmen-tally, compared to other similar projects around the world due to the unique and hard nature of the Jurassic gas fields and the depth of the wells.

“The reservoirs of the Jurassic

gas fields are non-traditional in terms of depth and geological formations; therefore, they are considered hard rocks that are cracked geologically. Moreover, in addition to the high tempera-tures and pressures, these reser-voirs contain a high percentage of H2S which should be treated very cautiously. Consequently, the company has developed special monitoring systems to achieve the highest levels of HSE to pro-tect personnel, environment and equipment. These were some of the complications and challenges which KOC did not have to con-front before. Also, the specifica-tion of liquids available in these deep reservoirs changes rapidly with temperature and pressure.

Asked about the precautionary procedures which the company has taken to avoid the leakage of poisonous gases, he said KOC regularly and periodically con-

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Drilling 12 deep developmental wells annually is part of a

plan allotted to develop Jurassic gas fields in

North Kuwait

ducts protective maintenance activities at all its installations. In case a gas leakage occurs, specialized teams evacuate the area and isolate the source of gas leakage and then signs are fixed in the area of the leakage.

These signs contain information about the leakage, such as the percentage of its concentration and the safe way of treating it in order to avoid hazards that might result from any mistake commit-ted in such areas.

Al-Enzi disclosed the company has set up systems to identify any gas leakage. These systems are connected with control rooms and alert signals that help to take quick and appropriate precau-tionary procedures to control the leakage automatically. KOC has also installed remote sens-ing technologies and inspection cameras, and linked production stations with a unified operation center. Also, specialized respira-

tory systems have been installed permanently inside the stations, production centers and other cen-ters. The company also provided first aid centers in locations and it regularly conducts drills for its personnel to prepare them to confront any emergency thereby protecting individuals, installa-tions and environment.

He further added that the compa-ny has fixed ventilation systems and central A/Cs inside the con-trol rooms to ensure that the pres-sure inside is higher than outside to avoid any gas leakage to these control rooms to protect person-

nel. The company constantly an-alyzes gas samples to identify the concentration of poisonous gases and, according to these concen-trations, it allots plans to update future projects and renew existing ones. He added that the company is keen on developing its national personnel so as to prepare them to surmount any such difficulties and challenges in the field of gas and oil production.

On the requirements which KOC allotted to achieve the 2030 stra-tegic goals, Al-Enzi stressed the need to develop production programs, through seeking as-sistance from specialized in-ternational companies, so as to increase production of heavy oil and non-associated gas in north Kuwait and hike the production to 4 million bpd. It is also nec-essary to recruit highly qualified personnel to fulfill these goals.

With regard to the process of im-porting gas until 2018, Al-Enzi

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The gross cost of gas and constructional

projects is over KD2 billion

said the importance of importing gas for the mid-term until 2018 lies in the fact that it is used as a clean source of fuel for generat-ing electricity and its cost is less than that of crude oil. Moreover, the step of replacing oil with gas permits the company to export larger quantities of oil, thereby optimizing the added value of a barrel of Kuwaiti crude oil.

With regard to the clear expan-sion which has been fulfilled in Exploration and Gas Directorate at KOC, Al-Enzi pointed out that these expansion activities have been accomplished as per precise studies conducted by the compa-ny within the past few years with the help of international consul-tants. The results of these stud-ies emphasized the fact that it is necessary to expand the activities of Gas Sector. In addition, these expansion activities are aimed at achieving integration and creat-ing an integrated unit for explo-ration and gas.

On the company’s strategic plan in the field of exploration, Al-Enzi said KOC’s 2030 strategy is aimed at adding 750,000 bpd and 1.5 billion cubic feet daily through exploration operations. He clarified that the company has allotted several current and fu-ture strategic projects to achieve this plan. These projects depend mainly on a number of explora-tion programs in the desert and marine areas of the country that include geophysical and seismic surveys. Moreover, Exploration Group carries out several geolog-ical, geophysical and geochemi-cal studies to identify the areas where it is probable to find large

quantities of hydrocarbon. After that, the areas are classified as per their capabilities to identify which exploration program will be implemented in this regard.

With reference to the respon-sibility which Exploration and Gas Directorate shoulders to allot and carry out the plans in 2013, Al-Enzi made clear that this responsibility is epitomized in allotting development plans for the non-associated gas re-serves. He indicated that the di-rectorate accomplished the first phase of the program which has been allotted to develop the Ju-rassic non-associated gas depots in north Kuwait, as production reached 145 million cubic feet daily, along with 55,000 bpd of light oil. The second phase of the program is expected to be finalized by 2016, when daily production is expected to reach 600 million cubic feet of non-associated gas and 200,000 bpd of light oil.

Al-Enzi went on to say that the administration is currently studying the plans of the third phase which is aimed at increas-ing production of non-associated gas to one billion cubic feet per day and 350,000 bpd of light oil by 2020. He stressed that the administration spares no effort

to achieve the strategic goals of Exploration and Production sector through optimizing gas production to make it a safe re-source for customers.

Asked about HSE criteria which are applied in operations, Al-Enzi confirmed KOC applies the latest criteria of health, safety and environment for the good of its personnel and environment, indicating the company stopped using evaporation-pits that were used to get rid of surplus water. In addition, KOC achieved very low rates of oil spills through improving the performance and operational methods of control-ling any oil spills.

“As for the percentage of flaring gas, we are proud that this per-centage has been decreased to 1.45 percent in 2012 compared to 17 percent in 2005.Moreover, we expect this percentage to de-crease to 1percent next year,” noted Al-Enzi. He added that the company encourages its person-nel and the contractor’s employ-ees to adopt the HSE culture and criteria by allotting programs in this domain, including the HSE Annual Award and Appreciation awards presented to employees and their sons, as well as to the contractors whose performance was distinguished during their contracts. The company also involves in programs designed to increase society’s aware-ness, especially those programs conducted for students. It also participates in exhibitions and seminars held in this regard and in projects and programs orga-nized to protect Kuwait’s envi-ronment.

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Emad Sultan: Increasing heavy oil pro-duction to 4 million bpd is one of the biggest challenges we confront

Kuwait Oil Company (KOC) diligently seeks to develop its heavy oil extraction operations as they play a significant role in achieving the strategic goals of Kuwait Petroleum Corporation (KPC) that are aimed at increasing oil production to 4 million bpd by 2020.

To shed more light on the com-pany’s efforts in this domain and the modern technologies applied to produce heavy oil, KPC World Newsletter interviewed Mr. Emad Mahmoud Sultan, Acting Director of Heavy Oil Group in KOC. Sultan began by clarifying that the company applies several techniques to extract heavy oil, including pumping chemical sb-stances in the reservoirs, using the horizontal wells and using steam. He described three prima-ry phases by which KOC extracts heavy oil as follows:

The first way: Cyclic Steam Stimulation (CSS)

This method depends on pumping steam into the well and keeping it there for a certain period of time to heat the surrounding oil to a temperature at which it becomes less viscous and flows more eas-ily. Oil is then extracted from the well, however, production will decrease as the oil cools down, so once again steam is pumped in and the process continues.

The second way: Steam Flood

This technology depends basi-

cally on drilling a special well to pump steam into the wells from which the heavy oil will be ex-tracted. The continuous inflow of large quantities of steam heats the oil and decreases its viscos-ity thereby allowing oil to flow more easily. This method helps to extract oil in a record time com-pared to other operations.

Third way: Cold Heavy Oil Production with Sand

This way is traditional as it de-pends on pumps in its operations of extracting oil. The oil extract-

21

ed by this way is associated with sandy or rocky precipitations.

With regard to the negative in-fluences on the environment of heavy oil production, Sultan emphasized that the heavy oil extraction method employed by KOC do not negatively impact the environment. He indicated the company utilizes the gases, which result from heavy oil ex-traction, to fuel the steam gen-erators used to heat the reservoir. Similarly, the water associated with heavy oil extraction, is re-pumped into specialized wells to aid in oil production.

Asked about the procedures which the company takes to increase production to 4 mil-lion bpd, Sultan made clear that Heavy Oil Group diligently seeks to develop its operations with the equipments and systems required in the operation of extracting oil. Add to this is the qualified senior officials that are required to man-age the coming phase.

He added KOC is determined to produce 60,000 bpd of oil in 2017-2018 as a primary phase for producing heavy oil.

After that, it will increase produc-tion to 180,000 and then 270,000 bpd until 2030 to achieve KOC’s strategic goals that are part of

the overall strategic directions of KPC.

Sultan stressed the step of pro-ducing the 60,000 bpd will be unprecedented even in Kuwait’s history of producing heavy oil. It will also be considered a prelimi-nary assessment of the company’s ability to meet the targeted goal and is therefore a very essential and crucial phase.

As for the 3D seismic surveys which KOC recently conducted, Sultan said the 3D seismic sur-vey is currently conducted on the deep wells because the mechani-cal waves which are emitted from the seismic equipment can reach 13,000 feet under the ground. Therefore, they can identify what is inside the reservoir accurately. He added KOC had applied the 3D seismic surveys experimen-tally on 10 square kilometers of shallow wells in 2010/2011 to assess the effectiveness of such technology on wells.

Seismic surveys are applied on shallow fields to assess their

effectiveness

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Ahmad Al-Eidan:Exploration Group adopts specific strategic plans aimed at increasing produc-tivity of oil and natural gas

To learn more about KOC’s new explorations and the steps in ex-ecuting the 2030 strategy, KPC World Newsletter interviewed Ahmad Al-Eidan, Manager of Ex-ploration Group at KOC. At the onset, Al-Eidan highlighted the diligent efforts and essential role of the Group in providing a new reserve of oil and natural gas for the country.

Al-Eidan affirmed that Explora-tion Group applies specific strate-gic plans aimed at increasing pro-

ductivity of oil and natural gas. These plans were launched as part of the 2020 strategic plan, which aimed at adding three million bar-rels of oil and four trillion cubic feet of gas.

In fact, the step of exploring oil and gas in North Kuwait in 2006 represented a key factor in fulfill-ing this strategic plan and it led to starting the preparations of allot-ting the 2030 strategic plan which is aimed to increase the country’s reserve and support productivity

to reach 4 million bpd of oil and 3 billion cubic feet of gas, while preserving the production ceiling.

He added that Exploration Group has achieved a number of signifi-cant explorations in prehistoric depths in North Kuwait such as at Al-Sabriya, Al-Rawdhatain, Northwest Al-Rawdhatain, Al-Rahiyah and Umm Al-Naqa. He further indicated that the compa-ny announced the exploration of ‘Al-Mutriba’ oilfield during the celebration of its Platinum Jubi-

Kuwait Oil Company (KOC) takes practical and steady steps to achieve its strategy, which is part of Kuwait Petroleum Corporation’s overall strategic directions aimed at increasing productivity to 4 million bpd. In its attempt to reach this goal by exploring more oilfields, KOC has conducted the largest seismic survey in Kuwait’s history.

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lee, which was attended by HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah.

As for the mechanism of dealing with new explorations, Al-Eidan clarified that KOC puts protection of environment among its top pri-orities. This emphasis on environ-mental safeguards has even led to suspending some exploration to make sure they do not have any negative influence on the envi-ronment. For example, some ex-plorations for oil are often asso-ciated with huge amounts of gas which need special equipments; therefore, the company is very cautious while dealing with such quantities. He added the company applies a unified mechanism in dealing with all areas which are subjected to exploration activi-ties. In addition, multiple criteria are employed in classifying these areas, as gas is of great impor-tance to the company’s develop-ment strategy.

“Definitely KOC does not dis-regard the economic feasibility of new explorations, particularly those having huge productiv-ity potential; thus, the company

prioritized Al-Mutriba oilfield and allotted the required plans to start production from the field as quickly as possilbe,” noted Al-Eidan.

With reference to the company’s recent explorations, he said these explorations will greatly help in

achieving the 2030 strategy, which is aimed at producing 750,000 bpd along with 1.5 billion cubic feet of gas. He added that the strategic plans which the company allotted in this domain can be summed up as follows:

Producing 50,000 bpd of oil, along with 200 million cubic feet of gas, daily by 2015.

Producing 500,000 bpd of oil and 700 million cubic feet of gas daily by 2020.

Producing 500,000 bpd of oil and 1.2 billion cubic feet of gas by 2025.

Asked about the seismic surveys conducted in exploration opera-tions, he said that within the last ten years unprecedented devel-opments in seismic surveys had made them one of the key tech-niques employed in oil and gas ex-plorations. New seismic surveys are able to efficiently identify the depth and thickness of reservoirs, as well as its extension under the ground and its hydrocarbon con-tents.

KOC prioritizes explorations that have

high productivity

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Al-Eidan clarified that seismic surveys are conducted by trans-mitting radio waves beneath the ground surface and then register-ing and measuring the reflected waves. The waves, created by mechanical vibrations or by set-ting off dynamite charges, are re-flected back from the subsurface depths and provide a clear image of the underground oil and gas reservoir beds.

He made clear that KOC started applying such seismic surveys in the 1990s and in 1995 applied a 2D seismic survey targeting Ku-wait’s mainland which is about 13,000 square kilometers. After that, it conducted the first 3-D seismic survey to cover all pro-ducing oilfields, which are located on 4500 square meters. He further added that the challenges which Exploration Group confronted while dealing with the non-tradi-tional fields and reservoirs made the Group search for other mod-ern technologies to manage its tasks. Accordingly, it assessed and approached the operations of seismic surveys which were recently conducted and covered

Al-Minagish areas, Umm Gudair, Kra’a Al-Maru, Northwest of Al-Rawdhatain, Arifjan, Umm Niqa and area of North Kuwait.

On the recent seismic survey, which the Group conducted in North Kuwait, Al-Eidan clarified that this survey is considered one of the biggest seismic surveys in

the world as it involved 220,000 receivers, the largest number of mono digital receivers, to get accu-rate and high quality seismic data. He added this survey, which was conducted in collaboration with KOC and Western G. Company, is expected to finalize executing the field operations by September 2014 and it is expected to finalize the operations of treatment by the middle of 2015, indicating 35 per-cent of these operations have been finalized. He pointed out that the primary results of the data help reduce danger in exploration op-erations in the deep Jurassic and Permian reservoirs.

On the locations of oil reservoirs, he indicated that Exploration Group carries out several geologi-cal, geophysical and geochemical studies to identify the areas which are expected to have high hy-drocarbon substances. They then classify them as per their capabili-ties to allot the appropriate explo-ration program for each area. He added the shape and depth of oil reservoirs are identified through the technology of geophysical and seismic surveys.

Developing and training Kuwaiti personnel tops

KOC’s priorities

25

With regard to the nature of res-ervoir and traps, Al-Eidan said oil traps are formed as a result of precipitation over millions of years. They are sandstone or limestone which is distinguished with its pores which allow hydro-carbons to assemble. Traps are di-vided into structural traps that are formed by geological movement and fissures or strati-graphic traps that are formed from two kinds of rocks of different character-istics. For example, one of them has intensive number of pores; whereas the other one works as a barrier and seizes oil inside the trap. Reservoirs on the other hand are rocks available in the shape of beds under the ground; in addi-tion, they are divided in line with the kind of the rock and how they precipitated.

Asked about the economic sig-nificance of exploring light oil, he said the economic feasibility of light oil and associated gas is very essential, as these explora-tions increase the local produc-tion of gas, as well as increase

the international price of Kuwaiti crude oil and its quality.

Underlining the role of Explo-ration Group in developing the skills of the Kuwaiti personnel, he indicated that KOC prioritizes

the development and training of Kuwaiti personnel to cope with the latest technologies applied in all exploration phases, in order to confront current and future chal-lenges. He further expressed his pride in the young generation who have been prepared to be-come technical experts in liaison with the international criteria, emphasizing the company is al-ways keen on providing qualified Kuwaiti personnel top positions in the oil sector.

Al-Eidan went on to say that Ex-ploration Group has also a consid-erable role to play in society and is involved in spreading aware-ness on the oil culture in the vari-ous institutions of the country. For instance, in association with the Education Ministry, it has partici-pated in developing geology syl-labus for the secondary stage as well as organizing intensive train-ing courses to over 150 geology teachers. This interaction allows them to know more about the oil industry in Kuwait and the role of the company in exploration and development in this field.

New explorations help in achieving 2030

strategy

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Hesham Al-Nouri:KOC possesses the latest and biggest systems of storing information in Kuwait

To learn more about these proj-ects and the highly developed ways of communication infra-structure and the work nature of Corporate Information Technol-ogy Group, as well as its relation with the other fields, KPC World Newsletter interviewed Hesham Abdulmalik Al-Nouri, Manager of Corporate Information Tech-nology Group at KOC.

Al-Nouri said the Group imple-mented several new technologies in the electronic field, including the electronic library project, the

e-signature and the Microsoft Link, which helped introduce several modern means, such as the instant messages and the vid-eo conferences, which provide a good opportunity for communi-cation among personnel includ-ing the social and humanitarian communication.

On the work nature of the Group, Al-Nouri indicated that Corporate Information Technology Group is in charge of managing all activi-ties related to financial services or human resources and sales.

He indicated that the Group has computerized the basic systems which are responsible for audit-ing the company’s businesses such as correspondences, leave applications, pensions and other issues. This helped in the smooth and easy exchange of correspon-dences among the company’s personnel.

With reference to one of the new technologies which the Group recently implemented, Al-Nouri said they launched the e-signa-ture project to computerize the

Corporate Information Technology Group at Kuwait Oil Company (KOC) has implemented several technological projects that allowed the Company to achieve a quantum leap in this field. These tech-nological projects are in line with the company’s 2030 strategic goals that aim to increase productivity and improve efficiency of personnel as well as bolster communications among personnel to accom-plish work in a precise and timely manner.

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signatures in the company’s cor-respondences. This led to faster work turnaround and put an end to bureaucratic procedures that used to hinder productivity in the past. He further indicated that the e-signature project helped in handling the problems and bu-reaucratic procedures that used to impede the project of updating work permits such as the amount of papers required in this domain and the time it took to complete them. This project also aided in completing work in a fast and ef-ficient manner and even helped insurance companies to achieve their business easily and timely, as they were dealing with a huge amount of paper work related to permits.

Al-Nouri further pointed out that the automated land lease system has greatly helped the govern-ment in providing lands required for establishing housing projects, as it provides the required in-formation about lands to avoid selecting lands which include oil installations or pipelines. He added that KOC has a privilege of possessing nearly 80 percent of Kuwait’s lands.

Al-Nouri clarified that Kuwait Petroleum Corporation adopted the e-library project and that Sheikh Talal Al-Khalid, Chair-man of the Board of Directors of Kuwait Oil Tanker Company’s (KOTC), Managing Director of Governmental, Parliamentary, Public and Media Relations at KPC and Chairman of E-library Committee, supervises it person-ally. He added this project is con-sidered the first of its kind in the

Gulf and Middle-East region as it includes the latest sources of in-formation and research regarding oil.

“We are currently computer-izing the research, lectures and conferences which the Kuwaiti oil sector conducts for its per-sonnel whether inside or outside Kuwait; the matter will ease the process of research for employ-ees,” added Al-Nouri, indicating the concerned officials of the project organized a number of workshops for all senior officials of the oil sector, including Nizar Al-Adsani, CEO of KPC, and all managing directors and their deputies of oil companies.

With regard to the smart fields and their relation to informa-tion technology, Al-Nouri af-firmed the technology is used in providing different services to the smart fields such collecting, saving, recovering and convey-ing information and data are of high quality, indicating the tele-communications applied in this project are carried out through cellular phones, Wi-Fi networks, Wi-Max, 4G, LTE or satellites.

Asked about ways of communi-cation among the different work centers in the company, Al-Nouri elaborated that the company has different kinds of communication to cover all permanent and move-able installations, indicating the company has nearly 250 installa-tions that are connected with each other by one fiber optic network. He pointed out that even the oil wells which are discovered over one year ago are used perfectly in terms of communication, as they

are connected to the existing net-work.

Al-Nouri indicated the company is connected to its counterparts of the oil sector through direct communication among employ-ees through a system called Ku-wait Oil Jet, adding the company has established a security fiber optic network covering approxi-mately 900 kilometers to cover the company’s installations in all areas in the country. Moreover, the company has initiated a net-work of social communication infrastructure entitled ‘K-Life’ which is considered the compa-ny’s Facebook. This network has helped bolster communication and collaboration scientifically and socially as well as increasing cultural awareness among em-ployees.

Al-Nouri further clarified that the ‘Integrated Emergency’ proj-ect which links oil rigs and the company’s installations help manage any problem or accident whose location is identified by a GPS screen allotted inside the ambulance of firefighting vehicle to control the problem as fast as possible.

Adding that KOC possesses the most modern systems of saving information in Kuwait as it has capacity of 1.2 million gigabytes, Al-Nouri emphasized that the project of managing information helps employees to accomplish their duties in a timely manner through electronically index-ing all papers available in the company. This project has been implemented in some of the oil companies, he concluded.

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Dhuha Al-Remaidheen: The crude oil desalinating unit is in charge of refining operations and extracting oil distillates

She considers the unit as the backbone of the refinery

Kuwait National Petroleum Company (KNPC) recently finalized the maintenance activities of its crude oil desalination unit, in line with its periodic and exhaustive maintenance program for Al-Ah-madi refinery. To shed more light on this unit and its importance, KPC World Newsletter interviewed Mrs. Dhuha Al-Remaidheen, Engr. Mech. Maint. Zone-3 at KNPC.

Al-Remaidheen clarified that the unit is considered the main dis-tributor for manufactured petro-leum products, while also operat-ing the production of petroleum products. She indicated that the unit consists of a group of com-plicated systems including dy-namic and statistic ones.

She made clear that the periodic maintenance operations of the units are conducted every four years and last for approximately 45 days based on a schedule and in accordance with procedures and rules that ensure the units work efficiently for the next four years.

Al-Remaidheen added that the maintenance operations are di-vided into three kinds and are as follows:

The daily activities which in-1. cludes maintaining and fixing any technical faults or daily breakdowns.

The periodical maintenance 2. every four years.

The emergency cases which 3. include any sudden technical faults.

She summed up the tasks of the Maintenance Division as:

Coordinating and supervising

the installation divisions to final-ize the maintenance operation in a timely manner.

Establishing contact between the higher administration and members of the group for refin-ing crude oil, so as to facilitate interactions with the senior offi-cials on decisions and applying them efficiently to achieve re-quired results.

Al-Remaidheen further pointed out that the crude oil desalinat-ing unit has certain goals to be accomplished, including the fol-lowing:

Storing the petroleum prod-1.

29

ucts for local marketing.

Using some products and 2. converting it for other units to avail of their refining ca-pacity.

Extracting the petroleum 3. products for exporting.

Al-Remaidheen added the unit receives the crude oil from KOC and assembles it in central tanks affiliated to KNPC. After that it starts the refining operations to extract the petroleum distillates, which are pushed later on in the local market in the form of pet-rol, diesel and naphtha. The unit's production of crude oil is around 200,000 bpd. The petroleum dis-tillates which are produced from the unit include the following:

Gas 1.

Liquefied gas2.

Naphtha3.

Kerosene 4.

Heavy fuel oil5.

Oil precipitates which are 6. treated by an auxillary unit

Asked about the consequences of oil desalination on the environ-

ment, Al-Remaihdheen clarified that KNPC constantly and dili-gently seeks to reduce the amount of oil pollutants. Accordingly, it applies certain regulations and criteria in line with its strategy and in accordance with strategic directions of Kuwait Petroleum Corporation (KPC) that are aimed at accomplishing sustainable de-velopment. In fact, the company managed to overcome the follow-ing pollutants that arise from oil desalination operations:

Air pollution: It managed to con-trol air pollution through treating gases and extracting their ben-efits before burning them.

Water contamination: It man-aged to treat the water used in cooling the equipments before releasing them to the sea.

Solid waste: It is classified and recycled by specialized compa-nies.

On the technical challenges which the unit confronts, Al-Re-maidheen said these challenges are epitomized in maintenance problems. Although the officials in charge of the unit assign ef-ficient plans to overcome any hindrances that impede the unit’s work, new problems surface dur-ing the actual operation of sys-tems and machines. In addition, sudden problems occur which necessitates allotting alternative plans to avoid any delay during maintenance activities.

As for the personal challenges that she confronts, Al-Remaid-heen said such challenges emerge during the maintenance activities since they take seven days of non-stop work round the clock.

This non-stop work for a woman does not conform to the nature of a conservative Kuwaiti society, where it is not appropriate for a woman to stay late in the refinery to finalize work. While the ten-sions arising from this problem have subsided it nevertheless continues in a society where cus-toms and traditions are always considered and respected.

Alternative plans help surmount problems of periodical maintenance

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3D seismic surveys are unprecedented technological achievement for KOC on the international level

Kuwait Oil Company (KOC) diligently seeks to achieve its strategy, which is aligned with the strat-egy of Kuwait Petroleum Corporation (KPC) that aims to reinforce its standing on the global level through developing the oil industry and increasing oil production to 4 million bpd. Consequently, KOC has taken a number of significant steps that help achieve its targeted goal. Among these steps is the 3D seismic survey which the company recently conducted to explore more reservoirs. This survey, considered one of the largest of its kind in the world, targeted the deep reservoirs of the Paleozoic and Jurassic era whose depth reaches over 23,000 feet. The survey was also tasked with collecting information about the shallow Cretaceous era reservoirs. It is worth mentioning that the survey was conducted on 47,000 square meters; which means 26 percent of Kuwait’s area.

In fact, KOC has a long history in the field of seismic survey, es-pecially 2D surveys, which was launched in the 1960s and went on until the 1980s.

In 1985, a dual 2D seismic sur-vey was conducted on Kuwait’s full area. After that, KOC started depending on the latest scientific

techniques in this domain. Thus, in 1996-98 it conducted a num-ber of 3D seismic surveys that formed the first phase of apply-ing the modern seismic survey in Kuwait’s oilfields.

In 2003, KOC conducted a 3D seismic survey in collaboration with one of the biggest interna-

tional companies working in this field using mono digital recep-tors at Al-Minaqish oilfield in west Kuwait. This experience, which was gained over three years, enabled KOC to develop cost-effective 3D seismic surveys that cost roughly the same as tra-ditional surveys. This unprece-

31

dented achievement, even on the international level, enabled the company to develop a complete database on oilfields in Kuwait. This database, comprising of high quality structural plans gathered using the latest technology, can be used in the future to allot plans to develop production from the oilfields. The success of this sur-vey has encouraged the company to apply this modern technology intensively across several of its projects, including a seismic sur-vey to explore oil reservoirs over North Kuwait that employed over 220,000 mono receptors.

Furthermore, KOC has targeted through geophysical and geo-logical technologies the hard and unconventional reservoirs such as the reservoirs which have frac-tures and to identify the type of these fissures and their directions to collect enough information through which the company can allot the most appropriate way for drilling operations.

In the view of this, the company has allotted its visions as per the information it collected as fol-lows:

- Establishing 3D models for the reservoirs and supporting them with advanced technologies. This helps in accurately assessing the hydrocarbon reserves and sup-porting future production.

- Applying the latest technology in managing projects to acceler-ate the process and decrease the period spent between explora-tion and production. This helps in easily achieving the strategic production goals.

Kuwait is one of the first countries which applied the 3D seismic survey with the technology of mono-digit receivers

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Dr. Naji Al-Mutairi:KISR has distinguished relations with the Kuwaiti oil sector

To know more about the contribu-tions of KISR in treating the en-vironment and its modern scien-tific research which are aimed at improving and rehabilitating the desert soil and protecting man’s health, KPC World Newsletter interviewed Dr. Naji Al-Mutairi, Director General of KISR. At the onset, Al-Mutairi clarified that technological research plays a significant role in improving the quality and efficiency of oil prod-ucts by using bacteria in oxidiz-

ing sulfur that is present in crude oil and oil distillates.

Al-Mutairi added that unprec-edentedly KISR developed a bio-logical product used in improving the desert soil. This is considered the first of its kind worldwide and has been used in improving 5,000 square meters of soil at Al-Ahmadi Refinery Garden and around 10,000 meters of ground in a garden associated with KISR in Al-Sha'ab Al-Bahari area. This innovative product led to increas-

ing the growth rate and enhanc-ing productivity of crops such as tomatoes and clover, and is ex-pected to play a significant role in achieving good economic and environmental results.

On the feasibility of research in biotechnology and its relation with the oil industry, Al-Mutairi emphasized that KISR plays an influential role in treating the en-vironment which is polluted with oil. In addition, it is considered one of the pioneering scientific

Kuwait Institute for Scientific Center (KISR) is considered a pioneering center for scientific research in developing the oil industry and improving the efficiency of its products. KISR has developed sub-stantial methods to treat the oil lakes and its pioneering results have been adopted by United Na-tions to treat and rehabilitate oil lakes internationally and gained it several local and international awards.

33

institutions in the field of bio-technology. It is also considered a founding member in the nation-al committee for biotechnology and genetic engineering and it also represents the International Center for Genetic Engineering and Biotechnology.

KISR also possesses a significant heritage in this field as it man-aged to create biological ways to treat oil lakes following Kuwait’s Liberation War in 1991. It has developed effective and feasible solutions, including projects for rehabilitating the bottom of oil lakes using biological, physical, thermal and chemical techniques. This project is considered one of the biggest environmental proj-ects in the Middle East, and its results have been approved by UN as a method for rehabilitat-ing oil lakes internationally.

Al-Mutairi indicated that the treated soil has been used in de-veloping pioneering gardens in Al-Ahmadi area such as the “Jap-anese Garden”, which is consid-ered a symbol of the successful

efforts of scientific research in the country. This treated soil converted the soil which was polluted with oil into a rich soil ready for agriculture. It has also

been used in designing and estab-lishing gardens that preserve the environment and protect human health, while reflecting the pio-neering scientific research taking place in KISR.

With reference to the scientific collaboration between KISR and KOC regarding microbio-logical researches, Al-Mutairi emphasized that KISR has dis-tinguished relations with the Ku-waiti oil sector as represented by Kuwait Petroleum Corporation (KPC), Kuwait National Petro-leum Company (KNPC) and KOC. He added that the institute is keen on providing a common vision which enables it to meet the requirements of research and achieve its developmental ambi-tions.

Al-Mutairi further said the insti-tute focuses, through its joint re-search with KOC, on developing oil production so as to increase productivity to 4 million bpd by 2020 while at the same time en-hancing heavy oil production. KISR is also tasked with pro-

We have initiated the second phase of “Solar Energy Applications” project in May and we

hope to finalize it in two years

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viding consulting, technical and technological services based on a framework of mutual long-term collaboration on several fronts, such as oil production techniques, assessing oil and water in depots, corrosion studies and HSE stud-ies.

Al-Mutairi added KISR has contributed significantly in de-veloping the Kuwaiti oil sector through participating in several projects, including the project of desulfurization using 12 bacte-rial species that are able to ex-tract sulfur from oil. This helps improve the competitive effi-ciency and increase the demand for Kuwaiti oil and its products in the international market. It also helps to reduce the harm-ful corroding effects of sulfur. In addition, the project emphasizes the joint approach of KISR and KOC towards reducing the num-ber of expatriate personnel and foreign companies through im-

proving the sufficiency of the na-tional personnel and developing their skills, as well as harnessing modern technology in line with Kuwait’s circumstances.

Indicating that KISR’s success in separating bacterial species and using them in oxidizing sulfur helped convert the sulfuric waste, which is produced from KNPC refineries, into useful biological compounds, Al-Mutairi said that this led to increasing botanical production and reducing harmful environmental effects. He added that the biological insecticide, which resulted from separating some bacterial species locally,

has a wide range of applications in controlling white flies and palm tree yeasts. Accordingly, this project was classified as the best environmental project on the level of GCC countries.

Al-Mutairi disclosed that the in-stitute has recently discovered three new bacterial species that are being examined along with eight species, which were dis-covered earlier, to identify their characteristics and effectiveness to be used in the field of poultry production. Also, the institute’s success in using bacterial spe-cies that are separated from lac-tic acid and using it as antibiotics for poultry in Kuwait has been acclaimed.

Saying that KISR is currently collaborating with the oil sec-tor to accomplish a number of new projects regarding oil pipe-lines and expansions, Al-Mutairi stressed that the project for iden-

KISR is a pioneering international scientific center specialized in

developing oil industries and improving the

efficiency of its products

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tifying and controlling the bac-terium responsible for corroding pipelines is of significant impor-tance. This bacterium is present in the water used in producing oil and helps form S2 which cor-rodes oil pipelines and blocks oil expansions, leading to oil leaks that harm the environment. This project is considered the first of its kind in the Middle East and brings together biotechnology and the petroleum industry.

Asked about the contract signed between KISR and KPC concern-ing the applications of solar ener-gy, Al-Mutairi said the institute is keen on bolstering scientific col-laboration with leading national institutions such as KPC to avail of the techniques of alternate en-ergy. Consequently, the institute has conducted a study to assess the technical and economic feasi-bility of applying the techniques of solar energy in the oil sector.

Saying that the institute managed to achieve the first phase of the project of applying solar energy techniques in the oil sector, Al-Mutairi pointed out that results showed that the project can be applied in all of KPC’s utilities as per its future strategy and vision. This project, which is considered one of the institute’s important projects, will also help reduce harmful gas emissions.

Al-Mutairi revealed that the in-stitute has agreed with KPC to commence implementing the second phase of this project which includes several solar en-ergy applications. This phase, which started last May and is scheduled to be completed with-

in two years, will enable the cor-poration to train and develop its national personnel in the field of solar energy. Moreover, the per-formance of these applications will be assessed technically and economically.

The second phase of this proj-ect includes two major appli-cations; the first is to use solar energy to generate electricity in

areas around the power stations of the sector. This will also help reduce the burden of power sta-tions run by Ministry of Elec-tricity and Water, while contrib-uting in reducing the amount of harmful gases, in line with KPC strategic directives that aim to preserve the environment.

The second application, which is known as solar heaters, ba-sically depends on the primary treatment of crude oil through heating oil at oil assembly plants and increasing its tem-perature to 120 degrees Celsius instead of using gas. This ap-plication will help save nearly 20 to 50 percent of the energy currently used to heat crude oil; in addition this will also help in reducing the amount of pollut-ants that result from using gas to heat crude.

KISR unprecedentedly produced an organic

product used to improve the desert

soil and enhance the productivity of crops

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KPC launches a group of essential environment projects

The oil sector’s headquarters is a friendly building to the environment on the occasion of Earth Day celebrations

Kuwait Petroleum Corporation has launched a number of significant initiatives aimed at increasing awareness of environment cases and providing appropriate solutions for problems that harm the Ku-waiti environment. Disposing waste through applying modern technology is one of the key pivots of social responsibility and its concepts are aimed at achieving sustainable development.

One of the environmental initia-tives is the project for recycling waste inside the oil sector’s com-plex. The project, which coin-cides with the celebrations of Earth Day that annually falls on April 22, is aimed at achieving the following goals:

Preserving the natural re-1. sources.

Reducing the amount of 2. waste.

Reducing the pressure over 3. waste landfills.

Encouraging employees to 4.

preserve the environment.

Spreading awareness among 5. the various groups of the so-ciety over the importance of classifying wastes and sepa-rating them as per the nature of its kind (solid, liquid…etc).

The actual launch of the waste recycling project was epitomized in a dedicated attempt conducted by the Environment Department in KPC when it wanted to dis-pose of expired neon lamps that included a small percentage of mercury, a hazardous substance.

The officials in charge of Envi-ronment Department were look-ing at the best environmentally friendly way of disposing of these neon lamps. The process of recycling the lamp began by applying a system that separated glass, mineral substances and the mercury.

Subsequently the Environment Department launched awareness campaigns that targeted person-nel in the oil sector to increase their awareness of the environ-ment and the hazards of waste. In addition, the department dis-

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tributed modern waste boxes that were classified according to the kind of waste which they receive such as paper, plastic and other items.

In fact, the project of recycling waste in the oil complex was launched alongside other proj-ects, including a project for con-serving electricity and water.

The project for conserving water within the oil complex came into effect by replacing traditional taps with auto-taps that minimized the consumption of water. This curbing of consumption was also applied to the use of energy as represented by the use of internal lighting. The concerned officials at KPC sought the assistance of new systems to achieve balance between the needs of employees for energy and the need of curb-ing its consumption. Therefore, it fixed fluorescent lamps and other modern equipments to pre-serve energy consumption inside the oil sector’s complex, as well as turning off some of the lights

within the oil complex after offi-cial working hours and also turn-ing on lighting systems run on solar energy.

The diligent efforts of the Cor-poration did not stop with imple-menting energy and water saving ideas within its complex and cre-ating awareness among its per-sonnel. Instead the corporation collaborated with its subsidiar-ies to design a clear strategy to preserve the environment and accomplish the concept of sus-tainable development in every location where it launches its ac-tivities whether this location is in the sea or on land. For example, Kuwait Oil Company, which rep-resents KPC’s arm in exploration and production, launched the ‘marine reserve’ project, which is located four miles away south Al-Ahmadi City. This project is aimed at preserving the marine environment in Kuwait, particu-larly the coral reefs. It is also considered an important marine lab for scientific institutions and

centers to conduct their studies and marine researches.

Furthermore, the corporation seeks to increase the green area through establishing gardens and afforesting areas surrounding the utilities of the oil sector. For in-stance, it launched the Japanese Garden, which was established in cooperation with Japanese government, on one of the lo-cations that was affected by the fire which flared up in oil wells. It also established the nature re-serve called ‘Spirit of the Desert’, which represents an environment lung for the personnel of Burgan oilfield. In addition, the Spirit of the Desert is a safe shelter for the local and migrant birds and natural soil for the desert plants and fungal life. It plays also sig-nificant role in controlling de-sertification. KOC also launched another ambitious environmental project labeled the ‘Al-Abdaliya nature reserve’ which was estab-lished on 3 million square meters of land and provides appropriate

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circumstances and natural life for land plants and animals.

KPC and its subsidiaries have ac-complished a number of projects aimed at preventing contamina-tion of the marine environment. These projects can be summed up as follows:

Suspending the oily sludge hole of Al-Shuaiba Industrial area. It is worth mentioning that Kuwait National Petroleum Company (KNPC) began removing oils from the hole to cleanse the soil.

Updating Sulfur Recovery Units in Al-Shuaiba Refinery to treat the necessary suspension of unit. Add to this is the step of increas-ing the percentage of recovering sulfur from 92% to 96%.

Operating the unit of treating the oily sludge to extract oils result-ing from the refineries, as the unit treats 10,000 cubic meters annually.

Accomplishing the project of re-covering gasoline steams in Sa-

bah and Al-Ahmadi depots.

Achieving the project “Zero Am-monia Emission” which is ap-plied in the plants of Petrochemi-cal Industries Company (PIC). In addition, KPC succeeded in reducing the percentage of burn-ing gases in fields from 17.5% in 2005-2006 to 2.5% in 2009. This percentage is considered the least in the corporation’s history. There are several other environ-mental projects carried out in the current time such as the project of treating the industrial water in KNPC refineries.

To reinforce the concepts of so-cial responsibility, KPC and its subsidiaries seek diligently and incessantly to partake in launch-ing environment awareness pro-grams among civil society institu-tions such as universities, applied education institutes and schools. Moreover, they hold seminars and lectures to highlight the cor-poration’s efforts in preserving the environment and developing manpower in a healthful, admin-istrative and technical manner.

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Media Relations Dept.Kuwait Petroleum Corporation

Focal interest ... Global reach

Over the years, Kuwait Petroleum Corporation has been a leading giant in the petroleum and hydrocarbon industry. Through a clear vision and sharp focus, KPC has become one of the world’s most respected, trusted and reliable suppliers of energy to the world.Our commitment continues.Discover more today at : www.kpc.com.kw

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KPC Corporate campaign ENG.pdf 3/11/09 9:41:22 AM