Abu Dhabi National Oil Company (ADNOC) on Wednesday announced plans to invest $3.1bn in a project to introduce crude processing flexibility at its Ruwais oil refinery.
The project forms part of the state oil company’s strategy to improve margins after it announced plans to invest $109bn in its gas and downstream capabilities last November.
A joint venture of South Korea’s Samsung Engineering and the Netherland’s C B & I, was awarded the engineering, procurement and construction contract for the project.
The refinery modifications are scheduled for completion by the end of 2022 and will enable the Ruwais Refinery-West complex to process up to 420,000 bpd of Upper Zakum crude or similar crude from the market.
This will free up Murban crude, which commands a higher price in global markets, for export, ADNOC said.
“Enabling the Ruwais Refinery-West to process Upper Zakum, or similar, medium sour crude, in place of Murban light sweet crude, will allow us to extract greater value from our crude resources,” said ADNOC director of downstream directorate Abdulaziz Abdulla Alhajri.
“It will mean we can maximise the benefit of price differentials to enhance refinery margins, improve the middle distillate products and release valuable Murban crude into the market.”
The modifications will add an atmospheric residue de-sulphurisation unit to process the Upper Zakum crude or similar crudes.
This will be used to upgrade medium and heavy oils and residues to more valuable transportation fuels and partially convert residues to low-sulfur fuel oil and hydrotreated feedstocks.
ADNOC plans to expand oil production capacity to 3.5 million barrels per day (bpd) by the end of 2018.