QATAR: Petrochemical sector set to get $25 billion investment

Investments totalling $17 billion are expected by 2017 and $8 billion in a second phase of petrochemical products with completion expected by 2020, QNB said in its "Qatar Economic Insight 2012.”

The country's petrochemical industry currently produces around 2.6 million tonnes per year (tpy) of ethylene, a crucial building block for more complex petrochemical products.

It also produces 350,000 tpy of olefins, another key ingredient, produced by "cracking” natural gas and naphtha to form simpler chemical compounds with shorter carbon chains.

Ethylene and olefins are then processed further to produce a range of final products with a total output of around 2.9 million tpy.

"QP (Qatar Petroleum) has been investing heavily in the petrochemical sector and a number of expansions have recently been completed, which will add around 1 million tonnes to production in 2012,” QNB said.  

QP has major stakes in all petrochemical production in Qatar, either directly or through Industries Qatar (IQ), a publicly listed company which is 70% owned by QP.

The largest petrochemicals producer is the Qatar Petrochemical Company (Qapco), which is owned by IQ (80%) and Total Petrochemical (20%).

Qapco is one of the largest producers of low density polyethylene (LDPE) in the Middle East and currently produces 700,000 tpy, following the completion of a new 300,000 tpy LDPE facility.

Qapco also produces about 800,000 tpy of ethylene and 46,000 tpy of sulphur.

To diversify and expand its downstream industrial base, Qapco has set up a number of joint ventures.

It has a 63% stake in Qatofin, a plant that began operations in 2010 and has the capacity to produce 450,000 tpy of linear LDPE (LLDPE, a shorter-chain polyethylene than LDPE that is mainly used in the production of plastic bags and wrapping material).

In November 1997, Qatar Chemical Company (Q-Chem) was established as a JV between QP and Chevron Philips Chemical Company. Its $1.2 billion ethane cracker plant began operations in 2004 and has a capacity of 500,000 tpy of ethylene, 453,000 tpy of high-density polyethylene (HDPE, a stronger plastic than LDPE), 47,000 tpy of hexane-1 and 36,000 tpy of sulphur.

A second $1billion plant (Q-Chem II) was completed in 2010, boosting production by 350,000 tpy of alpha olefins, which is used to produce 350,000 tpy of HDPE. Q-Chem II was constructed at Ras Laffan in conjunction with an ethane cracker, with a capacity of 1.3 million tpy of ethylene, some of which is being used as a feedstock for other Q-Chem II production.

"Qatar is moving up the value chain from basic petrochemicals to more complex products,” QNB said.

Source: Daily "Gulf Times", Doha; 9 Nov 2012

(Syed Rashid Ali, Karachi, Pakistan)