MENA Petrochemicals Special Report

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NewsBase special report on the petrochemical industry in the Middle East & North Africa

Transcript of MENA Petrochemicals Special Report

  • 1. April 2012 NewsBase Special Report MENA Petchem Projects News Analysis Intelligence Special Report Published by NewsBaseOVERVIEW 2 IN THIS NEWSBASE SPECIAL REPORT The Arab Spring and its impact on MENA downstream projects 2 Petchem promise While the Arab Spring brought upheaval to muchSAUDI ARABIA 3 of the MENA region, several major petrochemical projects are steaming forward, and will bring Sadara changing the game 3 enormous increases in the regions output capacity.QATAR 5 The largest of these is Sadara Aramco-Dows 50:50 joint venture that is likely to cost around US$20 billion. (Page 3) Shell finally enters Qatars petrochemicals sector 5 Pearl GTL appears to have helped open the door for Shell in Qatar, as it follows up the project withUAE 7 a petrochemical venture in Ras Laffan. (Page 5 Borouge 3 expansion project Abu Dhabis Borouge expansion is set to bring set for late 2013 start 7 together ADNOCs competitively priced feedstocks with Borealis Borstar polyolefins.(Page 7)ALGERIA 8 Algeria is keen to retain the value of its natural resources by increasing its downstream Eyeing up Algerias Arzew 8 infrastructure, but progress has been slow at the flagship Arzew ethane cracker. (Page 8)EXPORT OUTLETS 10 These four are among a host of projects that will see the Middle Easts capacity rocket in the next Middle East export projects decade. A wide range of ventures are under way to key to expansion 10 open up export routes for their output. (Page 10)For analysis and commentary on these and other stories, plus the latest downstream developments, see inside Copyright 2012 NewsBase Ltd. Edited by Ian Simm All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
  • 2. MENA Petchem Projects April 2012 page 2 OVERVIEWThe Arab Spring and its impacton MENA downstream projectsThe Arab Spring took a major toll on downstream activity across North Africa. However,as stability returns, the focus is beginning to turn back to delayed projects and potentialgrowthBy Ashok Dutta A number of plants in Libya and neighbouring countries were shut down because of feedstock shortages Downstream projects in Saudi Arabia saw little impact, remaining stable There remain challenges when investing in North Africa; however, appetite appears to be thereOn March 7, a senior energy analyst with per year ethane cracker at Ras Lanuf in patch in the GCC, he said.Goldman Sachs, Jeffey Currie, set the Libya, which forced Egypts Oriental His views are shared by Sriharshatone for a leading oil and gas conference Petrochemicals Company (OPC) to run Pappu, a Dubai-based analyst at HSBCin Houston when he said: History does its 160,000 tonne per year polypropylene Global Research, who commented thatnot repeat itself, but it does rhyme. His (PP) plant at around 80% capacity. the overall impact on the Middle Eaststatement is open to several In Syria, which is the largest consumer petrochemical industry had beeninterpretations. of polyethylene (PE) and PP resins in the minimal, given there are major However, in the Middle East and North East Mediterranean region, a number of petrochemical complexes in the regionAfrica (MENA) home to nearly 56% of converters have been running plants at mainly catering to the European andthe worlds proven reserves of crude oil rates of 30-50%. Asian markets.and natural gas few will deny that Along with the dip in output, producers The political unrest in MENA had anhistory was made with the Arab Spring have also faced logistical issues: land impact on trade flow, but the domesticof 2011, from both from a geopolitical transportation costs to Syria for PE and market is quite small, he said in aand business perspective. PP resins have increased by an average research note. He added: The While oil production remained US$5-20 per tonne since the unrest consequent spike in crude prices,undeterred in the six Gulf Co-operation began last spring. meanwhile, had a net positive effect onCouncil (GCC) states, the scenario was the business operations of majorquite different in Libya, with over 1.6 Lower Gulf petrochemical players within the GCC,million barrels per day of output being In the GCC states, a prime concern is the particularly Saudi Arabia, Qatar and thehamstrung for more than a month. On the demand/supply scenario in Asia. UAE. The bulk of the petrochemicalnatural gas front, production was affected The GCC downstream sector is driven capacity is in the Egypt, besides Algeria, Libya and primarily by demand and prices, Colin Looking ahead, the future seems to beTunisia, with supplies being curtailed McKenzie, a senior vice president in bright for GCC downstream producers.through the sub-Mediterranean pipelines Saudi Arabia with US engineering firm For its part, the Royal Commissi