Plastic Fantastic

Petrochemical Industry

Qatar is the second largest producer of petrochemicals in the GCC, and plans are afoot to more than double its current production to strengthen its foothold.

In an effort to take a larger market share in the region, Qatar Petroleum and Shell have announced plans to develop a large-scale project together in the Ras Laffan Olefins project. Estimated to cost around $6.4 billion, the entire project will produce 1.1 million tons per annum of ethylene and 170,000 tons per annum of propylene, it will include a mono-ethylene glycol plant with a capacity to produce 1.5 million tons per year, a linear alpha olefins plant with an estimated capacity of 300,000 tons per annum, and an oxo-alcohol plant with a capacity of 250,000 tons per annum. Once all aspects of the project are complete, it should increase Qatar’s total capacity by 3.32 million tons per annum. Qatar Petroleum Company (QAPCO) is also planning to increase its production quite considerably with the aim of expanding the capacity of its current plant in Mesaieed to between 950,000 tons and 1 million tons per year of ethylene from its current 280,000 tons. These projects are expected to be completed by the end of 2018 and should leave Qatar with a total capacity of 7.2 million tons per annum for ethylene, which would represent a 177% increase, as well as a 4.49 million ton annual capacity for polyethylene and 540,000 tons of polypropylene, according to BMI. But Qatar doesn’t plan to stop there. “By 2020, Qatar aims to produce around 23 million tons of petrochemical and other chemicals. This is a huge increase within just a few years,” Nasser Jehman Al-Kuwari, General Manager of Qatar Fuel Additives Company (QAFAC) explained to TBY. To do so, Qatar is planning to invest over $25 billion to expand and develop the domestic petrochemical and chemical industry. This will all be in line with Qatar’s National Vision 2030, as well as the National Development Strategy 2011-2016. The government is seeking to develop its petrochemical sector and consolidate Qatar’s position as a major force in the industry. Qatar Petroleum is planning to further expand its production by launching an IPO. The company hopes to raise $879 million for a new petrochemical subsidiary. It is expected to sell a 26% share in Mesaieed Petrochemical Holding Company, and hoping to stimulate its domestic stock. Mesaieed Petrochemical Holding Company owns shares in three petrochemical companies: Qatar Chemicals, Qatar Chemical II, and Qatar Vinyl. Also, Qatar National Bank will oversee the transaction with Deutsche Bank mandated as the financial advisor.

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