Al Zour Emerges As Qatar’s VLSFO Supplier Of Choice

28 Jul 2023 Issue: 66 / 30 By: Jamie Ingram

Energy relations between Qatar and Kuwait have deepened considerably in recent years due to Kuwait’s burning need for LNG imports. Now energy flows are beginning to trade in the other direction, with Kuwait supplying Qatar’s bunkering market with all its fuel oil since March.

Kuwait’s 615,000 b/d Al Zour refinery has become the sole supplier of very low sulfur fuel oil (VLSFO) to nearby Qatar in recent months. The huge greenfield refinery started up late last year, and its third and final CDU began operations in early July. Kuwait Petroleum Corporation (KPC) targets full operations by year-end (MEES, 14 July).

Observers had long been anticipating Al Zour’s ramp up, and have been keen to assess its impact on regional fuel oil markets in particular. The refinery was initially conceived to supply fuel oil to domestic power plants and as such it has a high fuel oil yield of approximately 45%, implying 275,000 b/d at full capacity (MEES, 24 March). Kuwait has now pivoted from its original strategy and intends to maximize revenues from Al Zour by prioritizing exports (MEES, 26 May, in a move which will intensify the refinery’s impact on regional markets. (CONTINUED - 752 WORDS)