Quatar Petrochemicals reports about Q1 2010

(OfficialWire) -- The Qatari petrochemicals industry continues its inexorable rise to becoming a major supplier to the world market. But BMI's latest Qatar Petrochemicals Report warns that the global economic downturn has delayed some major projects by up to two years.

Qatar's policy of economic diversification has led to a surge in investment in projects for the export of petrochemicals. In 2009, Qatar had ethylene capacity of 2.6mn tonnes per annum (tpa) feeding downstream units that included 400,000tpa low-density polyethylene (LDPE) and 450,000tpa high density polyethylene (HDPE). By 2015, it should have ramped up capacities with olefins capacities including 6.25mn tpa ethylene and 900,000tpa propylene, feeding downstream units providing 1.6mn of polyethylene (PE) capacity, 700,000tpa of polypropylene (PP) and 220,000tpa of polystyrene (PS). Qatar will represent 30% of the increase in the GCC's total cracker capacity between 2009 and 2015.

Notably, Qatar Petroleum's subsidiary Qatar Intermediate Industries Holdings and South Korea's Honam Petrochemical announced that their 70:30 US$2.6bn petrochemical joint venture (JV) planned for Mesaieed would be delayed from its original date of 2011 to 2013, leaving many wondering whether it would ever be built. In July 2009, the partners indicated that they would not only revive the project but also enlarge it, adding a 700,000tpa EG plant and increasing the capacity of the mixed xylenes unit from the original 120,000tpa to 600,000tpa. Planned ethylene capacity was also raised from the original 900,000tpa to 1.05mn tpa. Other capacities will follow the original plan, including 700,000tpa PP, 600,000tpa styrene and 220,000tpa PS. BMI forecasts that the QP-Honam JV will probably come onstream in 2014.

Qatar remains in second place in the petrochemicals rankings for Middle East and Africa with 62.7 points, down 1.5 points since the previous quarter due to delays in capacity expansion. This puts it 4.1 points ahead of Kuwait and 11.6 points behind Saudi Arabia.

MRC

April 14 (plastemart) -- Oman Polypropylene has restarted its 340,000 tpa polypropylene plant at Sohar. The plant was under a long maintenance shutdown for a period of about two months, resulting from a shutdown of a 116,000 bpd oil refinery operated by the Oman Refineries and Petrochemicals Co (ORPC) which resumed operations early last week.

MRC

Price increase was caused by high demand in conditions of lowered load of single facilities and by export programs the first two months. From March exports were seriously cut down and production increased. In April Russian producers minimized exports.

In spite of it, insufficient PP supply caused by demand increase and upcoming May suspensions of Kapotnia and Ufa capacities is still being felt. Lack of raffia is being partly compensated by PP supplies from Turkmenia. The situation with moulded PP is worse. Prices have reached the level of RUB 56.000 - 59.500/mt, including VAT, FCA. The alternative of Russian PP from Europe or Asia will cost from RUB 62.000/mt, including VAT, CPT.

PP deficit in European market has led to significant price increase in April. European producers have raised April PP prices on EUR 100-120/mt comparing with March, PP-homo prices to supply into Russia have reached the level of EUR 1.160 - 1.200/mt, FCA. Some producers have almost completely cut down their export programs due to long-term shutdowns. Export price increase is expected no earlier than the end of May. Asian PP also is expensive enough for Russian converters. April PP-homo pricesare in the range of USD 1.400-1.550/mt, CFR Saint-Petersburg, with the condition that the material will arrive in May only.

MRC

More information about Russian PP market can be found in our Price Reports.

April 14 (yarnsandfibers) -- CB&I announced that the ethylene cracker project in Singapore has been successfully started up, producing on-specification ethylene and propylene. The cracker complex is owned and operated by Shell Eastern Petroleum Ltd and is an integral component of the Shell Eastern Petrochemicals Complex project in Singapore, which comprises modifications to the existing Bukom Refinery as well as the building of a new world scale mono-ethylene glycol (MEG) plant on Jurong island.

The 800,000 tonnes per annum (tpa) cracker increases Singapore's ethylene capacity by 40 percent while also producing 450,000 tpa of propylene, 230,000 tpa of benzene and 155,000 tpa of butadiene. The ethylene cracker uses Lummus Technology proprietary ethylene cracking technology, and the butadiene extraction unit uses proprietary technology from BASF/Lummus Technology.

CB&I, in a joint venture with Toyo Engineering Corporation, completed the engineering, procurement and construction of the cracker complex. During the course of this project, employees achieved over 39 million work-hours without a lost-time incident, a world-class safety achievement. More than 12,000 workers were employed at the peak of construction, and a ferry line was commissioned to provide transport each day from mainland Singapore to the complex on Bukom Island, approximately eight kilometers away.

MRC

April 13 (omnexus) -- The Dow Chemical Company and Bain Capital Partners, a leading global private equity firm, announced jointly that they have signed a definitive agreement under which Dow's Styron Division will be divested to an affiliate of Bain Capital for $1.63 billion. As part of the transaction, Dow has an option to receive up to 15 percent of the equity of Styron as part of the sale consideration. Additionally, the transaction includes several long-term supply, service and purchase agreements which will generate substantial value for both Dow and Styron. With the purchase price and the significant long term contracts, Dow will be able to substantially deleverage and achieve an attractive value for the Styron divestment. The transaction is expected to close by August 2010, subject to completion of customary conditions and regulatory approvals.

"This transaction is yet another step in our disciplined approach to portfolio management, and is consistent with both the timeline and value we previously communicated for these assets," said Andrew N. Liveris, Chairman and Chief Executive Officer. "We are committed to further focusing our portfolio by shedding non-strategic assets that can no longer compete for growth resources inside the Company, and in the process generating funds for further debt reduction and liberating resources for Dow's higher growth, higher margin portfolio of technology, market driven businesses."

As a standalone, privately held business, Styron will be a leading diversified chemicals and plastics company with attractive global positions in a related set of markets and a unique product portfolio with a large presence in the styrenics value chain. Styron brings together a balanced portfolio of plastics, rubber and latex businesses that share feedstocks, operations, customers and end users. The company will benefit from a leadership position in its two flagship products, polystyrene and latex, as well as global scale, unrivalled customer relationships, and a robust innovation pipeline.

Styron is expected to have approximately $3.5 billion in revenue (based on 2009 data), with 40+ manufacturing plants in all geographic regions, and approximately 1,900 employees. Its businesses serve a diverse customer base in markets such as automotive, appliances, packaging, paper & board, carpet, durables, electronics, optical media, tires, and technical rubber.

MRCMRC Reference

Share in the Russian market, 2008:

polyethylene - 2.5% (including LLDPE - 33.1%);

polypropylene - 0.8% (including PP-impact - 1.1%);

polystyrene - 2.6%.

Annual sales growth in Russia, recent 5 years:

polyethylene - 55%;

polypropylene - 28%;

polystyrene - 2%.

Imports by processing technologies:

pipe extrusion;

film extrusion;

sheet extrusion;

foaming.