Qatar to up chemicals, LPG and petrochem output

MOSCOW (MRC) -- Qatar is set to step up its chemicals, petrochemicals and LPG output in the coming years, said HE the Minister for Energy and Industry, Dr Mohamed bin Saleh al-Sada, as per Zawya.

Qatar will raise its output of chemicals and petrochemicals to 23mn tonnes per year (tpy) by 2020, he said. Some important contributing projects are Al-Karaana and Al-Sejeel, in addition to a Qafco expansion, which is the world's largest single-site producer of both ammonia and urea.

Al-Sada said Qatar's LPG production, which currently stands at 11mn tonnes per year, will go up by 0.5mn tpy next year with the 2014 commissioning of the Barzan Gas Project. In 40 years since the North Field gas discovery, Qatar's LPG industry has grown rapidly, particularly so, in the last decade, the minister said.

More LPG volumes are expected from the Bul-Hanaine oil field development, which will not just enhance crude oil production, but will also add important quantities of ethane, propane, and butane.

Upcoming expansions in the oil and gas sector include the Barzan Gas Project in 2014, which will play a significant role in meeting the needs of giant projects, including the facilities planned for hosting the World Cup in 2022.

Some of the energy demand is driven by Qatar's large-scale expansion of the petrochemicals sector, which supports the diversification and growth of the Qatari economy. Such developments, the minister said, will be important for a region such as the Middle East, where the commissioning of several new petrochemical supply projects will substantially increase the amount of LPG that is available to the international markets.

Having said that, al-Sada pointed out there were still several key issues confronting the LPG industry, such as the current outlook for LPG demand growth in developing markets, and whether supply growth was enough to support projected growth in regional and global LPG demand.

As MRC wrote before, Qatari government established the Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat), which now holds the exclusive rights to purchase, market, distribute and sell the emirate’s chemical and petrochemical output on the global market. Muntajat is headed by CEO Abdulrahman Ali Al Abdulla, and will establish 36 global offices in addition to logistics establishments and warehouses across the world to support its marketing, sales and distribution activities.
MRC

MOSCOW (MRC) -- Reliance Industries board is strongly backing telecom, its latest venture, and petrochemicals that propelled it to fame in its early years but it is reluctant to invest in the oil and gas which has swallowed USD14 billion but plunging output along with regulatory and pricing uncertainty has clouded the outlook, said Indiatimes.

A senior company executive told ET that the board has questioned further investment in exploration and production (E&P) that was once the key driver of its profits but is now almost irrelevant to the valuation of its shares that have lagged the market in recent years.

The company's directors are merely following the verdict of the market. "Currently RIL's E&P business is completely ignored by the market but we are very excited about the new expansion planned at its refinery complex in Jamnagar. Markets are particularly excited about the new cracker project that will greatly enhance RIL's ethylene production and also reduce its use of expensive imported liquid gas by 50%. This cracker will make RIL's petrochem division comparable or even better than refineries in the US and the Middle East and can give an RoI of 20%," said Jal Irani, oil and gas expert. The company's petrochemicals business has done well, while the telecom venture has enormous potential. The retail business has also gathered momentum in recent quarters.

Company executives say that these businesses will overtake oil and gas production.

The performance of the business has fallen drastically. In April 2010, when gas output touched the peak of 60 mmscmd, the group's oil and gas business posted a segment revenue ofRs 4,318 crore and a EBIT of Rs 1,702 crore. In October 2011, output fell 20% from a year ago and the segment's revenue fell to Rs 3,563 crore and EBIT dropped to Rs 1,531 crore. In the following October, output plunged 35.1%, revenue dropped to Rs 2,254 crore and EBIT sank to Rs 866 crore. In October this year, segment revenue and EBIT dropped to Rs 1,464 crore andRs 356 crore, respectively.

Reliance Industries is one of the world's largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes.
MRC

MOSCOW (MRC) -- JM Eagle faces billions of dollars in damages following a federal jury decision that North American largest manufacturer of PVC pipe knowingly sold substandard product to government entities for water and sewer systems from 1996-2006, said Plasticsnews.

During that period, three states and 42 cities and water districts named in the whistle-blower lawsuit spent USD2.2 billion to buy plastic pipe from JM, which was formerly called J-M Manufacturing, according to Eric Havian, a lawyer with Phillips & Cohen LLP, who represented the plaintiffs.

JM officials plan to appeal the unanimous verdict reached Nov. 14 in a seven-week trial before U.S District Court Judge George H. Wu. The appeal will be based on evidence the jury was not permitted to hear or see.

Havian said JM Eagle lied about whether its pipe met strength and durability standards required by government specifications and that it is liable the False Claims Act. The law encourages private citizens to sue companies that are defrauding the government and recover funds on its behalf.

A new jury will be seated for the second phase of the trial to determine the amount of damages owed. The whistle blower, John Hendrix, is entitled to 15-25% of the amount recovered.

Hendrix, who worked as an engineer in JM Eagle’s product assurance division in New Jersey, did not take the stand. However, other witnesses testified that plant managers were under pressure to meet production quotas and they would remove "reject" tags from pipe that failed to meet quality standards and ship it to customers.

One of the plaintiffs, the Calleguas Municipal Water District in Thousand Oaks, Calif., spent USD4 million to replace JM Eagle pipe that had broken and leaked seven times, according to Havian. During the trial, five government entities were selected from the larger group as exemplar plaintiffs. The others are the cities of Reno, Nev., and Norfolk, Va., and the South Tahoe Public Utility District and Palmdale Water District, which are both in California.

However, dozens of other states, cities and water districts that bought JM Eagle pipe but did not join the lawsuit also could qualify to participate in the next phase of the trial addressing monetary damages.

In a related matter, a hearing on a joint motion for JM’s former parent company, Formosa Plastics Corp. USA, to settle with a long list of plaintiffs for USD22.5 million has been pushed back from Dec. 2 to Dec. 19. Attorneys requested additional time for more than 300 cities, municipalities, water districts, and potential parties time to evaluate and respond to the proposal.

JM Eagle has offered a 50-year warranty on its thermal plastic pipe products since 2010, when the lawsuit that was filed in 2006, was unsealed. The company has 17 manufacturing plants and more than 1,000 employees.

MRC

MOSCOW (MRC) -- Borouge is seeking to increase its customer base by threefold as it prepares to enact a massive capacity expansion at its petrochemicals plant in Abu Dhabi, reported GV.

The joint venture of Abu Dhabi National Oil Company and Borealis is in the process of expanding its polymers output to 4.5 million tonnes a year from 2.5 million tonnes currently. The move comes as listed regional petrochemical giants, such as Saudi Basic Industries Corporation, struggle with stagnant European demand and the revival of polymer producers in North America.

Borouge has opened offices in Asia and has been talking to more customers in industries such as automotive and infrastructure supply, according to Wim Roels, the chief executive of Borouge’s Singapore-based marketing firm, which operates as a separate entity from the production firm based in Abu Dhabi.

Meanwhile, the Arabian Gulf’s hydrocarbons industry is facing slowing demand growth in China and the prospect of a shale gas boom there. Mr Roels said Borouge, which has customers in China and South East Asia, was sanguine about that.

"China’s GDP is still growing at 7.5 %, which is not the double digits of a couple of years ago, but I don't think the double digits will come back," he said.

Mr Roels noted that shale gas in China had the potential to affect Middle East producers by freeing up coal for petrochemical production.

The majority of shale reserves in China are believed to be methane, which can be used to produce electricity. But the fuel is less useful as a feedstock for petrochemical crackers, which use "wet" gas such as ethane, propane or the crude derivative naphtha.

However, China has invested heavily in petrochemical plants that use coal. Next year, its coal-driven chemicals factories are forecast to account for more than a quarter of the world’s expansion in ethylene production capacity, according to South Korea’s Woori Investment & Securities.

As MRC wrote previously, Austrian petrochemical company Borealis has begun preparations for the start of Borouge 3 in Ruwais, Abu Dhabi. Borouge 3, includes an 1.5 million mt/year ethane cracker, three polyethylene (PE) units with a capacity of 1.43 million mt/year and two polypropylene (PP) with a capacity of 960,000 mt/year.

Borouge is a joint venture between the Abu Dhabi National Oil company and Borealis.
MRC

MOSCOW (MRC) -- SIBUR Tobol is the second gas carrier to operate under a long-term charter agreement with Sovcomflot, Russia’s largest ship owner and tanker operator, reported SIBUR on its site.

The carrier was built by Korea-based Hyundai Mipo Dockyard Co. Ltd. SIBUR Voronezh, the first gas carrier custom-built for SIBUR, arrived at Ust-Luga in September 2013.

The carrier has already completed six deliveries of LPG to European customers. SIBUR Tobol is moored for test loading at SIBUR's new terminal as part of its start-up and commissioning programme. Once loading in Ust-Luga seaport has been completed, the carrier will head for Sweden on an LPG delivery.

A naming ceremony for SIBUR Voronezh and SIBUR’s other new LPG carrier, SIBUR Tobol, took place on 4 July 2013. SIBUR Tobol is expected to arrive at Ust-Luga in November 2013.

Both gas carriers were designed to SIBUR's specific requirements using the latest shipbuilding technology and in partnership with experts from Sovcomflot Group.

SIBUR's Ust-Luga terminal is the largest in the CIS and the first in Northwest Russia to tranship LPG. The terminal is capable of handling up to 1.5 million tonnes of LPG and up to 2.5 million tonnes of light oils each year. The terminal’s distinguishing feature is its isothermal LPG storage tanks and its compatibility with almost all existing vessels, including refrigerated ships.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and is a leader in the Russian petrochemicals industry.
MRC