UAE’s refining capacity pushes ahead at full steam

Takreer, the refining subsidiary of Abu Dhabi National Oil Company (Adnoc), is about to realise its great leap forward as the new expansion at the Ruwais refinery has progressed by more than 85 per cent according to a recent announcement made during the annual Middle East Petroleum and Gas Conference 2013 in Abu Dhabi.

The expansion plan, which was signed in March 2010, comprises a complete and complex refinery for 417,000 barrels a day (bd) and will cost about $10 billion. It will double Takreer’s refinery capacity, according to Ahmad Omar Abdullah, chief operating officer of the company.

The expansion will make Ruwais the largest oil refinery in the region and one of the largest in the world. It is scheduled to be completed by the end of the first quarter next year and will meet the growing demand of petroleum products in the UAE and increase the country’s ability to export more.

While the UAE is a substantial exporter, it did import in the last few years some gasoline; about 25,000 bpd were imported in 2011 to augment its own production of 93,000 bpd to meet demand. This is not because of a lack of refining capacity but because large portion of the refineries’ naphtha production is exported or used in the petrochemical industry.

The Ruwais refinery will process Murban crude oil, which is rich in light and middle distillate products. Because of the conversion units in the refinery, an additional 2.7 million tonnes a year of gasoline will be produced and no more imports will be required.

Another feature of the expansion is the catalytic cracking unit, which is geared not only to increase light products at the expense of heavy fuel oil, but also produce a substantial quantity of olefin gases (propylene and ethylene) as feedstock in downstream units.

The refining industry in Abu Dhabi started in Umm Al Nar in 1976 and in Ruwais in 1982 with many additions at these two sites over the years. But Takreer was established in 1999 to take up the refining responsibilities from Adnoc and assure product quality, environmental protection and employment for UAE nationals.

The company is supported by Takreer Research Centre (TRC), which is a collaboration between Takreer and Idemitsu Kosan of Japan to pursue product development and resolve operational problems as well as test new catalysts and evaluate technology choices. While the Centre is already operational, it is expected to reach its full potential by 2017.

Takreer’s expansion is on-going and does not end up here. The company has signed a contract to further reduce heavy fuel oil production by the installation of a delayed coking unit of 30,000 bpd capacity to enhance production of gasoline and other light products. The project also includes construction of a 40,000 tonne a year carbon black production facility to supply the petrochemical company Borouge and anodes for the aluminium smelters.

The project will cost $2.5 billion and will involve 12 processing units and associated facilities and is expected to be completed by the beginning of 2016.

Additional refining projects in the UAE are also advancing; the International Petroleum Investment Company (IPIC), an investment arm of the government, is going ahead with its 200,000 bd refinery in Fujairah, to be located close to the end of a new strategic pipeline from Abu Dhabi to the deep water port at Fujairah.

The refinery is expected to cost $3 billion and may be completed by 2017. A second phase to add petrochemical units is expected to follow.

When these projects are completed, the refining capacity in the UAE may exceed 1.35 million bpd considering the refineries of Umm Al Nar (150,000 bpd), Dubai (120,000 bpd) and the current Fujairah (80,000 bpd). Therefore, by 2017, the UAE may be refining close to 50 per cent of its crude oil production and will become a major petroleum products exporter. The product quality after the expansion will be in line with trends.

Takreer and the UAE are to be congratulated for this drive to refine such a large portion of the crude oil production. This will help obtain a higher value for oil exports and serve the overall economic interests and objectives of the country.