KIPIC Al-Zour Oil Refinery

Client: Kuwait Integrated Petroleum Industries Company (KIPIC)

Location: Zour, Kuwait

Business Segment: Energy Solutions

Industry: Fuels

Services: Engineering and DesignProcurementConstruction

Map showing the location of KIPIC Al-Zour Oil Refinery

Executive Summary

Fluor's joint venture FDH JV team was selected by Kuwait Integrated Petroleum Industries Company (KIPIC) as the preferred bidder for major engineering, procurement and construction (EPC) packages for the new Al-Zour Refinery project. The FDH JV team is executing the EPC of Packages 2 and 3 of the Al-Zour Refinery on a lump sum basis.

The Al-Zour Refinery is located in Al-Zour, approximately 90 kilometers south of Kuwait City, adjacent to the existing Al-Zour South Power Plant. When completed, the new complex is expected to be one of the largest refineries in the world, producing 615,000 barrels per day (BPD).

Client's Challenge

KIPIC is a subsidiary of Kuwait Petroleum Corporation set up by the State of Kuwait to manage refinery, petrochemicals and LNG import operations in the Al-Zour complex.

KIPIC is constructing a new world-class grass roots refinery in Kuwait to produce low sulfur fuel oil to replace high sulfur fuel oil used in local power plants. This large-scale refinery is designed to process 615,000 BPD of light Kuwait crude oil or 535,000 BPD of heavy mix Kuwait crude oil.

This refinery uses the latest technology to comply with stringent environmental regulations to protect the local environment and at the same time produces the latest environmentally friendly ultra-low sulfur diesel fuels for worldwide markets as well as jet fuel, kerosene and naphtha feedstock for petrochemical plants.

The Al-Zour Refinery will use a combination of conventional and proprietary licensed hydro processing technologies to convert the light and heavy crudes into low sulfur fuel oil (LSFO) and lighter products.

Fluor's Solution

Fluor is leading the FDH JV, partnering with Daewoo Construction and Engineering and Hyundai Heavy Industries. This JV is also executing the brownfield and greenfield KNPC Clean Fuels MAB2 project at the nearby KNPC Mina Abdullah refinery in Kuwait. FDH JV provided KIPIC with the most competitive lump sum EPC offer for a combination of two packages for the Al-Zour project, thus securing the contract.

Packages 2 and 3 include scope and technology similar to the greenfield MAB2 project, with larger capacity and/or more parallel trains. The scope includes process units, utilities and infrastructure for the new Al-Zour Refinery project.

The contract was signed in October 2015. FDH JV leads the project from the Fluor's Amsterdam office, supported by offices in New Delhi, Al Khobar, Kuwait, Houston and Seoul. Sourcing of materials is global, with a preferential treatment to local suppliers and subcontractors. Peak labor at the site in Kuwait was 20,000 people.

The project has employed a strategy of large-scale off-site pipe fabrication and pre-assembled rack and pre-assembled unit (PAR + PAU) modular execution. Module fabrication took place at the COOEC-Fluor Heavy Industries Co., Ltd. (COOEC-Fluor) fabrication yard in Zhuhai, China.

COOEC-Fluor delivered 188 modules in 20 separate shipments with a combined weight of 65,000 metric tons. In addition, the yard fabricated more than 95,000 pipe spools of carbon, alloy and stainless steel pipe.

The final module shipment arrived in December 2019 at the project site in Kuwait. The project is 99% construction complete, and most of the utilities and infrastructure are already in operation/use.

Realization of the entire Al-Zour Refinery has been divided by KIPIC into five discrete packages as follows:

Package 1 Main Process Units (by others)
Package 2 Support Process Units Includes Hydrogen Recovery Unit (HR), Hydrogen Compression Unit (HC), Hydrogen Production Units (HPU), Sour Water Stripper Unit (SWS), Amine Regeneration Unit (ARU), Sulfur Recovery Units (SRU) and Tail Gas Treating Unit (TGTU), Flare, Sulfur Pelletizing/Conveying, Acid Gas Flare, Sulfur Storage Area
Package 3 Utilities and Offsites Includes Steam Generation Unit, Air Systems, Water Systems, Cooling Water Unit, EICS & ICSS, HV Substations, Interconnecting Pipe Rack, Wastewater Treating, and a large size campus area with Administration Building, Training Center, Laboratory, Mosque, HSE/Clinic/Fire-brigade, Central Control Room, Supermarket and dozens of refinery support buildings for security, operations and maintenance
Package 4 Tank Farm (by others)
Package 5 Marine and Export Facilities (by others)

Conclusion

The FDH JV team is executing the EPC of Packages 2 and 3 of the KIPIC Al-Zour Refinery. The Al-Zour Refinery is being built on a greenfield site located south of Kuwait City and will be one of the largest refineries in the world upon completion.

The Al-Zour Refinery was selected as the Top Refining Project for 2017 by Hydrocarbon Processing magazine. In April 2019, the project was awarded the Gold Award for HSE Excellence and the Gold Award for Environmental Excellence from the American Society of Safety Professionals. It managed a consistent performance and secured these awards again in 2020 and 2021. In addition, in 2021, the administration building received Global Sustainability Assessment System (GSAS) Design & Build Certification, achieving a four-star rating for excellence in sustainability.