The growing potential of Kuwait’s downstream

Kuwait

Bandar Al Qahtani, chairman of Kuwait Aromatics Company (KARO), talks to The Energy Year about the latest trends in international petrochemicals markets and preparing for increased feedstock throughput from Kuwait’s reinforced refining segment. KARO is a KNPC subsidiary that manufactures paraxylene, benzene and styrene monomers.

Can you give us an overview of KARO’s business and how it integrates with KNPC’s operations?
KARO is a holding company that manufactures and exports aromatics. We own aromatics production facilities in industrial areas in Kuwait through our affiliates. Our shareholders are KNPC, which has a 60% share, Petrochemical Industries Company (PIC), which holds a 20% share, and Kuwait Projects Company (KIPCO), which became the owner of the remaining 20% when it bought Qurain Petrochemical Industries in 2020.
KARO owns a paraxylene plant and is the majority owner of a styrene plant together with Dow. The paraxylene plant, Kuwait Paraxylene Production Company (KPPC), is our 100% subsidiary that produces paraxylene, benzene, light naphtha and a range of associated products. The styrene plant is called Kuwait Styrene Company (TKSC). It has styrene monomer production facilities and is 57.5% owned by KARO.
TKSC was established to produce aromatics products for KNPC from feedstock available in Kuwait. Today, it is a holding company with production facilities in the Shuaiba Industrial Area. Like KARO, it is 60% owned by KNPC together with PIC, which holds a 20% share, and KIPCO, which has the remaining 20%.
KPPC’s feedstock is supplied by KNPC. Equate Petrochemical Company manages the plant and is responsible for its safe operations and the manufacturing of different products. Sales and marketing of the products is handled by PIC. TKSC, on the other hand, uses feedstock supplied by KPPC and Equate.

What are the main trends at the moment in the market for aromatics?
Our facilities can produce 800,000 tpy of aromatics, and production progresses hand in hand with KNPC’s ability to supply us with feedstock. In this sense, the upgrade of the Mina Abdullah and Mina Al Ahmadi refineries driven by the Clean Fuel Project has proven beneficial for us, but we could also use greater output of naphtha to produce more paraxylene, light naphtha, heavy aromatics and LPG.
The demand for aromatics is healthy and set to increase, particularly in the automotive, construction and medical sectors. Paraxylene is used as feedstock for products such as PET [polyethylene terephthalate] for plastic bottles and polyester fibres. Benzene is used to manufacture industrial plastics and lubricants, as well as fuels, adhesives and solvents. Styrene is an important input used in the production of materials for packaging and insulation.
The expectation is that demand for these products will remain strong, so their prices are high. Prices nowadays are driven by China because it is the world’s primary producer and consumer of petrochemicals, especially paraxylene. India and Pakistan are also big buyers of petrochemicals.

How do you assess Kuwait’s efforts towards sustainability in the downstream segment?
Kuwait’s oil companies are extremely diligent about adhering to carbon dioxide emissions standards, which are reviewed frequently by the concerned parties. Valuing the environment and our surroundings has been part of our motto for a long time. We take careful measures and collect detailed metrics to ensure the safe and clean operation of our facilities and to protect our people and the environment.
Social responsibility and benefiting the community are aspects that are integral to the ethical framework of all K-companies, which we all contribute to and follow. KARO has programmes to support Kuwait University’s College of Engineering and Petroleum and to nurture the local marine environment, as well as other campaigns annually. We are proud of our participation.
With regard to environmental aspects and concerns, more education is needed in schools and universities, and the private sector needs to adopt a more systematic approach to changing the public’s perception of petrochemicals and plastics and their production. Sustainability should not just be seen as the obligation of companies but as a collective responsibility.

What would be your recommendations for further development of Kuwait’s petrochemicals sector?
The commissioning of the Al Zour Refinery, the upgrading of the Mina Abdullah and Mina Al Ahmadi refineries and the inauguration of the OQ8 (Duqm) refinery in Oman have significantly increased our production capabilities. The domestic downstream segment is about to experience important changes with the integration of KIPIC into KNPC, and capacity planning will be crucial.
Regarding capacity expansions, the ROI must be evaluated carefully before embarking on any new undertakings. New facilities will need land close to existing refineries and infrastructure to connect them in a way that ensures smooth distribution and exports, all of which are costly. The petrochemicals segment is very profitable for the country and crucial for its economic development, but it needs investments to keep growing and creating employment for nationals in line with current Kuwaitisation requirements.

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