Post on 10-Sep-2018
KPC Local Content:
Industrial Opportunities for Private Sector
Kuwait Investment Forum / 20-21 March 2018
KPC’s 2040 Strategic Directions
2
KPC’s Mission:
We optimize the value of Kuwait’s hydrocarbon
resources by operating commercially and globally in an
integrated and sustainable manner, while providing
opportunities for our people to grow and contributing to
Kuwait’s economic development
KPC’s 2040 Strategic Directions
3
Domestic Upstream (including Partitioned Zone)
• Achieve sustainable crude oil production capacity of 4.75 MM
bpd in 2040.
• Achieve sustainable non-associated natural gas production of
2.5 bcf/d in 2040.
Domestic Downstream
• Grow domestic refining capacity to 2.0 MMBPD by 2035 with
complex configurations, maximum offtake of domestic heavy
oil production and taking into consideration meeting local
energy demand.
• Integrate refining and petrochemical operations domestically.
Petrochemicals
• Grow the core petrochemical business inside and outside of
Kuwait.
• Expand into Downstream derivative and specialty chemicals.
Shipping
• Ensure the size and configuration of the fleet to meet long
term strategic cover and KPC marketing requirements.
114
71
89
107
127508
0
100
200
300
400
500
600
2018/19 -2022/23
2032-2025 2026-2030 2031-2035 2036-2040 Total
KPC’s Consolidated Capital Expenditure
4
KPC Projected Capital Requirements
Nominal USD bn.
KPC is expected to spend $114bn in CAPEX over the next five years and an additional $394bn beyond that to 2040
KPC is projected to
spend 76% of its total
required CAPEX on
Domestic Upstream
projects
76%
6%
9%
4%5% 1%
Domestic US International USDomestic DS International DSPetrochemical Midstream
KPC Developed its Local Content Strategic Directions in line with the government plans
5
Leverage refining and petrochemical businesses to deliver downstream manufacturing opportunities to the private sector, not less than 10 opportunities by 2025
Increase local private sector share in KPC spending and achieve a minimum of 30% for local suppliers and contractors contributions in capital projects spending by 2017
Enhance private sector participation in KPC through existing and future activities/investments:
– At least 4 opportunities by 2020– At least 5 additional opportunities by 2025
2040 LC Strategic Directions
KPC 2040 Local
Content Strategy
1
2
3
Local Content Strategic Objectives
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Increase effective participation of capable Kuwaitis in G&S supplier workforce
Maximize the competitive and sustainable LC development in the procurement of G&S
Expand the sustainable development of linked downstream industries
Increase participation of the private sector along the oil sector value chain
Engage with different stakeholders and advocate for enabling government policies and legislations
Strengthen internal capabilities, processes and systems
Kuwaitization of the workforce
Localization of procurement of goods and services
Development of linked downstream industries
Increase of Private sector participation
Stakeholder engagement & advocacy with the gov.
Enabling the operating model
Core Enablers
KPC Past Efforts in Private Sector Participation
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First Batch of fuel
stations
Second Batch of
fuel stations
Al Qurain petrochemical
company **
KNPC Lube Oil Blending
plant
Boubyan Petrochemical
company *
Calciner Project
PIC Salt and Chlorine plant
1995
2000
2004
2007
2005
* Participation in Equate (9%), TKOC (9%)** participation in Equate (6%) , TKOC (6%), TKAC (20%), TKSC (11.5% (TKAC owns 57.5% of TKSC))
KPC & Subsidiaries’ Local Spending
8
394.537
918.208979.123
997.325
1,398.06
1,287.75
0
200
400
600
800
1000
1200
1400
1600
Q4 11/12 Q4 12/13 Q4 13/14 Q4 14/15 Q4 15/16 Q4 16/17
(million KD)
KPC and the Private Sector Participation
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In view of KPC’s 2040 strategy, KPC has embarked onto a thorough Private Sector
Participation Strategy consisting of various 2040 Strategic Initiatives catering for local
content development, Kuwaitization enhancement and industrialization.
• Green Carbon• Bio-Diesel• MTBE from Methanol Plant• Packaging Plant• Bagging Plant• Maintenance Outsourcing• FCC Distillate into Aromatics Production• Kerosene into Linear Alkyl Benzene Production• Carbon Black from HCO• Expandable Polystyrene (EPS)• Polypropylene (PP) Film and sheet (Nonwovens)• Local Development of the OCTG Value Chain• Facilitate Cooperation between Local Well Ops.
Service Providers and Int’l Tech. Providers• Local Valves Assembly• Localize Manufacturing of Complex Valves• Localization of specialized non-critical maintenance
jobs
• Petroleum Industrial Park (PIP)
• Further Future Industrial Opportunities
• Polypropylene Film and Sheet (BOPP)• Linear Low Density Polyethylene LLDPE• Polypropylene (PP) Raffia• Spent Catalyst into Metal Recovery• Development of Chemicals Blending
Capabilities• Pipeline & Flowline Industry Value Chain• Common Chemical and Lube Oil Services• Pallet Production Plant• Carbon Dioxide• 43 Fuel Station, with SMEs coordination• O&M Opportunities in ZOR Refinery (Waste
Water Treatment Plant / Sulfur Handling Unit / Tankage / Marine Facilities)
• BoubyanPetrochemical company
• PIC Salt & Chlorine plant
• KNPC Lube Oil Blending plant
• Calciner Project• First Batch of Fuel
stations• Second Batch of Fuel
stations • Al-Qurain
Petrochemical company
Define Assess Under Implementation
Operate
Local Content Opportunities Offered already by KPC to Local Private Sector
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# Opportunity Name Short DescriptionAnnouncement
DateStatus
1 Carbon DioxideDeliver CO2 generated by KNPC Refineries to Enhanced Oil Recovery (EOR) program in KOC.
Mar 2017Preparing Feasibility
Study
2Polypropylene Film and Sheet (BOPP)
Build a Polypropylene (PP) Nonwovens Plant for health, hygiene and disposable products.
27 Nov 2017Evaluating
EOIs
3Polypropylene (PP)
Raffia
Build a Polypropylene (PP) Raffia Plant to produce Raffia bags used for construction and fertilizer bagging.
27 Nov 2017Evaluating
EOIs
4Spent Catalyst into
Metal RecoveryConstruct a plant to recover metals from spent hydroprocessing catalysts.
27 Nov 2017Evaluating
EOIs
5Linear Low-Density
Polyethylene (LLDPE)Build an LLDPE Film/Sheet Plant used for producing High clarity packaging.
28 Jan 2017Receiving
EOIs
6Biodiesel Business
Opportunity
Procure Bio Diesel from private companies who will set up Biodiesel Plant using Used Cooking Oil (UCO) and blend in Local Market Gasoil.
Mar 2017Evaluating Proposals
7CO2 Sale to Green Carbon Company
Recover and sell CO2 emitted to atmosphere from refineries, to external parties as part of Green Initiative and Private Sector promotion.
31 May 2016Agreement
under Finalization
Local Content G&S Opportunities that will be offered Today to the Local Private Sector
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Development of Chemicals Blending Capabilities Opportunity
Pipeline & Flowline Industry Value Chain Opportunity
Common Chemical and Lube Oil Services Opportunity
Pallet Production Plant Opportunity
Set up chemicals blending facilities locally to generate chemical products to be used in oil sector
operations and activities.
Set up production facilities in cooperation with international manufacturers for localizing value adding operations such as repair, coating and
threading services for pipeline products.
Chemicals and lube oil are an integrated part of petrochemical plant operations. The opportunity is to supply required common chemicals / lube oil for
the petrochemical plant operations; including storage, loading, and safe disposal of spent
products.
Petrochemical Solid Products are usually sold in packages whereby significant amounts of pallets
are required to move packages easily. The opportunity is to allow the private sector to
construct a pallet production plant to serve this purpose.