Refining & Petrochemicals Middle East - April 2010

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NEWS, DATA AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES APRIL 2010 NEWS 05 | BUILD & PROJECTS 09 | SCIENCE & TECHNOLOGY 11 | DOWNSTREAM DATA 30 | EVENTS REVIEW 32 GTL TAKES FLIGHT An ITP Business Publication, licensed by Dubai Media City AIR APPARENT GAS DETECTION IN DOWNSTREAM PRODUCTION FACILITIES REVIEWED REACTOR WATCH MULTIPOINT ASSEMBLIES ENABLE 3D REACTOR TEMP PROFILING KUWAIT’S EXPANSION PLANS EXCLUSIVE: QPIC CHAIRMAN SAYS INVESTMENT BACK ON THE AGENDA Qatar is taking the lead in adding value to its gas reserves with gas to liquids and kerosene blending projects

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Refining & Petrochemicals Middle East - April 2010 - ITP Business

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Page 1: Refining & Petrochemicals Middle East - April 2010

NEWS, DATA AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES APRIL 2010

NEWS 05 | BUILD & PROJECTS 09 | SCIENCE & TECHNOLOGY 11 | DOWNSTREAM DATA 30 | EVENTS REVIEW 32

GTL TAKES FLIGHT

An ITP Business Publication, licensed by Dubai Media City

AIR APPARENTGAS DETECTION IN DOWNSTREAM PRODUCTION FACILITIES REVIEWED

REACTOR WATCH MULTIPOINT ASSEMBLIES ENABLE

3D REACTOR TEMP PROFILING

KUWAIT’S EXPANSION PLANSEXCLUSIVE: QPIC CHAIRMAN SAYS INVESTMENT BACK ON THE AGENDA

Qatar is taking the lead in adding value to its gas reserves with gas to liquids and kerosene blending projects

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20 REFINERY GAS DETECTION Industry experts reveal how to select the right gas detection package for your refi ning and petrochemical facilities.

24 REACTOR WATCHMultipoint assemblies enable 3D temperature profi ling of process reactors says Chris Chant of Okazaki Manufacturing Company.

26 MIDDLE EAST DOWNSTREAM WEEKEvent report: Abu Dhabi conference addressed the critical issues facing the region’s dominant refi ners.

30 NUMBER CRUNCHERRefi ning and Petrochemicals Middle East provides market data and analysis for the region’s listed downstream companies

32 DOWNSTREAM DIARY Dubai Plast Pro 2010 delivered a knock-out conference in March. Check out the eclusive online gallery at ArabianOilandGas.com.

5 REGIONAL NEWSKuwait’s QPIC project on track • Local refi ning capacity up •Unipol nets Carbon Holding deal • SABIC raises MEG prices

10 MIDDLE EAST MARKET UPDATEBuild & Projects • Operations & Maintenance • Science & Technology • Equipment & Machinery • Sales & Shipments

14 NEW TIMES, NEW THINKINGContax Partners asses the steps project owners are now taking to ensure they identify, attract and secure the right contractors.

16 GAS TO LIQUIDS TECHNOLOGY FOCUS Monetising gas reserves whilst improving fuel emissions is being tackled by Qatar’s huge GTL project portfolio.

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1Contents

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Jacobs Engineering Group announced that it received a contract from Aramco to develop a basic engineering package.

arabianoilandgas.com

Qatar is interested in building a new receiving terminal for liquefi ed natural gas in Europe, with Bulgaria touted as the front running location.arabianoilandgas.com

PROJECT INAUGUARTIONONLINE GALLERY

The online home of:

ON

1 NPCC bags $560m ADNOC contract

2 KSA Alert: Oil industry terrorism threat

3 RAK Petroleum enjoys Oman gas success

4 Schlumberger snaps up Geoservices for $1 billion

5 J Ray McDermott nets Saudi crude gathering project

Participants at LNG 16 will discuss the increase of gas prices in the international market, according to Chakib Khelil.

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Oman LNG plans to keep its liquefi ed natural gas output steady at around 8 million tonnes a year for the foreseeable future but is ready to use spare capacity if needed.arabianoilandgas.com

EDITOR’S CHOICE

VIEW FROM JUBAIL Execlusive interview with the CEO of Sipchem, Ahmed Al-Ohali

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WEB FORUM

An eye on Saudi AramcoArabianoilandgas.com picture gallery takes you behind the scene of Saudi Aramco with brand new photographs of the energy giant’s different sites and activities.

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BREAKING NEWS AND VIEWS FIRST

MOST POPULAR NEWS

JACOBS BAGS ARAMCO CONTRACT

OMAN TO KEEP GAS OUTPUT STEADY

RISING GAS TOPS LNG16 AGENDA

QATAR EYES NEW LNG TERMINAL

Laffan Refinery InaugurationArabianoilandgas.com reporters were at the offi cial inauguartion of Ras Laffan’s latest Qatargas refi nery expansion. Follow all the action on as it happens on:

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Refining sector needs investment boost

The local refi ning sector needs intensive investment to meet booming local demand for refi ned products. Discussions on the sidelines of the Middle East Downstream Week in Abu Dhabi last month indicated

that far too few of the proposed refi ning projects have in fact gone through to execution phase.

Conversations over lunch were dominated by the cost of projects already announced, and the number of planned refi ning projects in the region. What disappointed me was learning how many of these projects have been slowed, shelved or cancelled altogether. Announcing major projects is all good, but the most important thing is to go ahead with these investments. Demand for fuels in the region is anticipated to rise every year for at least a decade. The region needs more refi ning capacity. I was also puzzled to hear about the cost of the newly announced refi ning projects across the Arab world, which

has reached US$146bn. This includes new refi neries and expansion plans, using numbers compiled by the

Organisation of Arab Petroleum Exporting Countries (OAPEC). Existing refi neries in the region are ineffi cient compared to best in class examples, and the goods churned out don’t meet many international standards. The OAPEC study suggests that 51% of the projects are delayed, while

26% of the projects have been shelved. This means only 23% of the projects are on track. Given the huge downstream

value which could be captured by local refi ners, this seems short-sighted. Project costs must be at bargain

levels now, and the consensus was that those which are currently on ice should get back on track as soon

as possible.

Abdelghani Henni, editore-mail: [email protected]

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US$1bnThe expected cost of the

methanol project in Algeria

Al-Qurain petchem seeks expansionNEWS

Kuwait’s Al-Qurain Petrochemi-cal Industries Company (QPIC) is looking for new investment opportunities across the Middle East region, and its existing projects remain on track, Issa Al-Isaa, vice board chairman of the Kuwaiti joint stock company, QPIC told Refi ning and Petro-chemicals Middle East.

“We are continuously seeking new opportunities in the petro-chemical sector, locally and in the MENA region,” revealed Al-Isaa. “As part of our long-term strategy, QPIC will be investing in the GCC and MENA region, our fi rst project outside Kuwait is the Methanol project in Algeria,” Al-Issa said.

“2009 was a successful year for us. Our net profi t at year end was up 226%, to US$24.61 million compared with the 2008 loss of $19.41 million,” he said. “Our net earnings per share (EPS) were $2.32 per share (KD 0.647), against negative earnings per share of $17.75 (KD 0.512) in 2008.” Al-Qurain is optimistic about 2010 and expects it to be a stable year, with posi-tive results. “As credit

QPIC profits jumped 226% in 2009, opening the door to new regional investments

APRIL 2010

markets improve and banks begin lending again, QPIC will aim to expand its petrochemi-cal and oil and gas investments,” Al-Issa revealed.

The company anticipates sign-ing the fi nal joint venture agree-ment for its methanol project in April. “All agreements are in place and we expect the fi nal signing to happen any day now,” Al-Issa told RPME. “We are ready to

award $200m EPC contracts for the project in the near future,” re-vealed the vice board chairman.

“We expect the commercial start up in 2013,” he added. The project is 49% owned by Sonatrach and 51% by Almet, which QPIC owns a major stake in.

The rest is split between local company Sotraco, Mitsui of Ja-pan, Lurgi of Germany and PPSL.

The Algerian Methanol project is expected to produce 1 mil-

lion tonnes per year. Almet won the project back

in 2007.

Issa Al-Isaa, vice board

chairman of QPIC.

Lurgi will be the lead EPC contractor for the project. The front-end engineering and de-sign (FEED) work was almost complete in late 2008. Construc-tion work will take a further 32 months. Sonatrach will provide the feedstock to the project with a subsidised price. “The price of the feedstock allocated to the project is very competitive,” said a Kuwaiti based source close to the project.

QPIC has two associate compa-nies, United Oil Projects (UOP), and the Kuwait Aromatics Com-pany, of which it controls 20%. The Kuwait Aromatics Company (KARO) also owns 57.5% of the Kuwait Styrene Company.

QPIC retains a stake in the Equate projects in Kuwait. “The TKOC, aromatics, and sty-rene plants that were recently inaugurated are long term in-vestments. The average pay-back period for a world-scale petro-chemical plant is between six to seven years. Having said that, the Kuwait Olefi ns Company started production in late 2008 and despite the global economic crisis, TKOC witnessed solid profi ts in its fi rst year of opera-tions. The aromatics and styrene

plants have begun production in late 2009 and we expect

the plants to perform well in their fi rst year of opera-tions,” he concluded.

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

5News

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OAPEC refining capacity upNew projects will add 5.03 mbpd of refined products by 2014

Refi ning capacity in the Arab world is expected to be increased by fi ve million barrels to 12.425 mbpd by 2014, according to a re-port issued by the Kuwait-based Organisation of Arab Petroleum Exporting Countries (OAPEC).

Saudi Arabia, UAE and Ku-wait are leading the trend due to their huge crude reserve capacity which represents almost 40% of the world’s extractable crude de-posits. Saudi Arabia started the PetroRabigh integrated refi ning and petrochemical project last

NAMA: Epoxy demand increases in 2010

Yanbu JV extendsbidding time

Global demand for Epoxy will reach 1.655 million tonnes in 2010, increasing to 1.810 million tonnes by the year 2014, accord-ing to a recent study by Saudi Ara-bian fi rm NAMA Chemicals.

The report indicates that the majority of this demand will come from Asia and Australia.

The European market ranks second worldwide in terms of Epoxy materials demand, reach-ing 400 000 tonnes during the current year and expected to in-crease to 420 thousand tonnes in the year 2014, NAMA said.

Saudi Aramco and ConocoPhillips have extended the deadline for bids for a solids handling unit at their Yanbu refi nery joint venture.The new bid deadline for the construction of the unit is June 1, industry sources said. It has also been reported that Saipem, Techint of Argentina, Petrofac, Senet, ThyssenKrupp Robins, Flsmidth and Daelim Industrial are all bidding for the solids handling unit. “The extension of the bidding closing date is due to additional work requested by the client,” a source told Reuters. US fi rm KBR has already com-pleted the front end engineering and design of the refi nery but it has been reported that the delay-ing of the bidding deadline may be due to design modifi cations.

year, which will be followed by Al Jubail and Ras Tanura integrat-ed projects in joint ventures with Total and Dow respectively.

In January, the Saudi govern-ment said that Aramco would build Jizzan oil refi nery rather than private fi rms that had bid for the delayed project.

The new projects will increase throughput of the 10 OAPEC na-tions noticeably due to the in-crease of demand on the refi ned products, and is expected to cost US$100bn, the organisation said.

“These projects will add near-ly 5.03 mbpd to the Arab refi n-ing capacity, but they are beset with challenges and obstacles, which could lead to postpone-ment or abolition of some of them, mainly those related to new refi neries,” OAPEC said in its 50 page study.

According to the study, Arab nations currently have 64 re-fi neries, pumping nearly 7.39 mbpd at the end of 2008 com-pared with 7.2 mbpd at the end of 2006.

“These obstacles include shortage of funding and low in-vestment return because refi n-ing ventures are normally not highly profi table. Another chal-lenge is the state of uncertainty in the energy market due to am-biguities surrounding the global demand for refi ned products as a result of lack of transparency in most consumers about forecasts on future demand,” it added.

EPC cost is also a major chal-lenge facing the construction of these projects, the report noted.The majority of the new projects are taking place in Saudi Arabia, UAE and Kuwait.

Abdulmohsen Al Al-Ogaili, CEO of NAMA.

Huntsman reveals new KSA projectHuntsman Corp and Saudi fam-ily-owned conglomerate Zamil Group started production at a joint-venture plant that will add 6.5% to the global ethylene amines supply. The 50-50 partners spent $288 million (1.08 billion riyals) to build the plant owned by Arabian Amines Co, the offi cial SPA news agency reported.

The plant starts at a produc-tion capacity of 27 215 tonnes per year but it can be increased to 41 000 tonnes per year.

The product will be marketed by Huntsman in Asia and Europe.

Ethylene amines are used in var-ious applications including asphalt, fuel additives, bleaches, corrosion inhibitors and fabric softeners.

“We are seeing a substantial up-ward price movement during the fi rst quarter of 2010 and strong demand,” Abdolmohsen Al Ogaili, CEO of NAMA Chemicals.

NAMA has continually in-creased its production capac-ity over the last fi ve years from 20 000 tonne to 60 000 tonne.

“By 2012, the production ca-pacity of our plant will increase by 100%, to be in the list of top fi ve major producers of Epoxy in the world. This will positively refl ect on the fi nancial performance of NAMA in general,” Al Ogaili said.

News 6

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

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Dow sets up ME polyurethane allianceDow Formulated Systems AND Saudi based Juffali & Brothers, announced they signed a busi-ness alliance in their polyure-thane systems business, in ad-dition to the construction of a polyol blends plants in Jeddah.

“This alliance reinforces Dow Formulated Systems’ commit-ment to our customers and the industries we serve in the Mid-dle East. Our longstanding busi-ness relationship with E.A. Juf-fali & Brothers has offered the conditions for this signifi cant step ahead that further acceler-ates the implementation of our

global business strategy based on our wide and detailed pres-ence, market knowledge,” said Juan Antonio Merino, general manager of Dow Formulated Systems, the new global business unit of Dow, which combines the company’s polyurethane sys-tems and epoxy systems capabil-ities, potential in research and development, technical service and tailored production serving its growing customer base with a global network of 30 system houses.

“We have been partnering with Dow in a variety of businesses

since 1976, and this important alliance allows us to further strengthen our relationship, in-creasing our ability to sustain the dynamic growth of our custom-ers in this region,” said Dr. Soua-hil El Farouki, general manager of Juffali Chemical Group.

“The planned facility will pro-duce Dow formulated polyols and the respective Dow Polyurethane Systems will be marketed in the region. The alliance with Dow is instrumental to ensure the new plant competitiveness, sustain-ability and long term success,” Dr. El Farouki added.

Aramco and Dow are set to relocate their multibillion dollar integrated petrochemical and refi ning joint venture project from Ras Tanura to Al Jubail, Saudi Arabia to save costs. The project is currently in the planning phase, with a number of international contractors working on front end engineering and design (Feed) studies.

Saudi Aramco Total Refi ning Co (Satorp) isexpected to sell Islamic bonds to help fi nance the 400 000 barrels-a-day facility that is being built in Jubail, KSA. The partners in the US$12 billion Saudi Aramco and the French supermajor Total have appointed Deutsche Bank AG, Samba Financial Group and Calyon to manage the sale. The sukuk is expected to be around $1 billion and the joint venture partners are also exploring the possibility of issuing an international conventional bond to reduce the dependence on short-term bank fi nancing.

Qatargas inaugurated the Laffan Refi nery in early April. The refi nery is one of the largest condensate refi neries, and the fi rst one in Qatar. It has a processing capacity of 146 000 barrels per stream day (bpsd) and utilises the fi eld condensate produced from the Qatargas and RasGas facilities. Construction of the project was completed in July 2009 by GS and Daewoo (GSDW).

BriefsClean diesel unit unveiledSaudi Aramco and Royal Dutch Shell’s joint venture, Sasref re-finery, has started commercial production at an ultra low sul-phur diesel unit targeting Eu-ropean markets, the company said in statement.

The unit at the 305 000 barrels per day (bpd) refi nery, located in Jubail on the Gulf coast, started production of around 100 000 bpd of ultra low sulphur diesel, making it among the fi rst Saudi producers with sulphur at less than 10 parts per million, Sasref said in a statement.

A company source said last month the unit would reach full production by the end of February after starting trial production.“The start of the unit reinforces our strategy to keep pace with future trends and comply with environmental and marketing requirements which will help Sasref to maintain its competitiveness in the Middle East and Asia,” said Abdulhakim al Gouhi, president, Sasref.

Sasref’s new diesel unit is the first in KSA to produce 10 ppm diesel

“The new unit meets the high-standard diesel specifi cations in Europe,” he added.

The cost of the upgrade was valued at more than $400 mil-lion, Gouhi said in January.The crude refi nery can export

as much as 60 000 tonnes of oil products per day, mainly fuel oil, naphtha, gas oil and jet.SASREF is a joint venture export refi nery owned 50 – 50 by Saudi Aramco and Shell. It is located in Jubail, and targeting Asia.

All Saudi Arabia refineries will produce the 10ppm diesel by 2014 instead of 500 ppm.

7News

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

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Snapshot

BDP International and Kanoo Freight join forces

Kuwait expects to receive approv-al to develop a $9 billion refi nery in China by the end of the year, a Kuwaiti oil executive said.

Kuwait Petroleum Corp’s (KPC) chief executive Saad Al-Shuwaib said the project’s inves-tors were still hoping to commis-sion the 300 000 barrels per day (bpd) refi nery by 2013.

“We expect to obtain fi nal ap-proval by the end of the year,” Shuwaib said.

The project has suffered years of delays. After initial approval in 2006, it has yet to receive Bei-jing’s fi nal nod.

Kuwait said last September it hoped to get fi nal approval in the fi rst quarter 2010. It will supply all the crude to the refi nery and produce one million tonnes of ethylene per year.

State-owned KPC and Sinopec each hold a 50% stake in the joint venture project, with KPC plan-ning to give 20% of its share to international partners, it said.

KPC was in talks with sev-eral international companies, Shuwaib revealed.

BP Plc was linked with the project in 2007, but in 2008 ap-peared to be out of the running

Don’t miss

18 - 21 AprilLNG16, ConferenceOran, Algeria

16 - 19 MayMEPIPES, MeetingAbu Dhabi, UAE.

24 - 26 MayThe 7th Middle East Refi ning and Petrochemicals Conference and exhibition.Manama, Bahrain.

14-16 JuneFirst Gulf Plastics SummitDubai, UAE.

Middle East petrochemical sector recoversEconomic indicators point to continued recovery for chemical companies in 2010, including a positive develop-ment for producers in the Middle East, with global chemical industry output forecast to increase 4.6%, off-setting a 4.6% contraction in 2009, Mohammed Al Mady, chairman of the GPCA and CEO and vice chairman of SABIC, told the 3rd annual general meeting of GPCA.

Al Mady expressed confi -dence that the recent crisis was over for the industry, citing data from the American Chem-istry Council (ACC) which pointed to chemical industry production growth averaging 3.7% across the Middle East, including 6.3% in Saudi Arabia 3.4% in UAE, 3.2% in Kuwait and 7.4% in Qatar.

Algeria to spend $23bn on refining sectorAlgeria’s state energy giant “Sonatrach” is set to spend US$23bn to increase its re-fi ning capacity, according to Chakib Khelil, Algerian’s en-ergy and mining minister.

Algeria is planning to spend more than $69bn on the en-ergy sector, including $23bn to develop the downstream and the refi ning sector. The plan includes the development of Tiaret refi nery on the west of the capital Algeria, along with the upgrade of various refi ner-ies located in Skikda in the east and Arzew in the west.

Kuwait readies for China JVKuwait will supply all the crude to the US$9bn integrated project

when Kuwait shortlisted Royal Dutch Shell and Dow Chemical Co as potential partners for refi n-ing and petrochemicals respec-tively. Kuwait said in September it had revived talks with BP.

BDP International and Bahrain-based Kanoo Freight, a division of Yusuf Bin Ahmed Kanoo, have formed a joint venture to capital-ise on the logistics and transpor-tation needs of the Middle East’s expanding petrochemical and refi ning industry.

“With signifi cant investments in the downstream petrochemi-cal industries and abundance of feedstocks, the region is becom-ing the epicentre of the global petrochemical industry, mainly in Saudi Arabia,” said BDP presi-dent and CEO Richard Bolte.

The new company will be based in Damam, in Saudi Arabia.

“The establishment of this joint venture will provide the services needed for the region to fulfi l its vision of economic diversifi cation and adding more value down-stream in the hydrocarbon indus-tries,” said Fawzi Ahmed Kanoo, board director of Kanoo Group and chairman of Kanoo Freight.

BDP said industry analysts have forecast that within 10 years, the Middle East would account for approximately 75% of the world’s petrochemical exports.

The integrated refining and petrochemicals project will produce 1million tonne of ethylene.

News 8

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Page 11: Refining & Petrochemicals Middle East - April 2010

Kayan works reach 90% Engineering works on the Saudi Kayan project are progressing as scheduled and the facility is expected to start up during the second half of 2010, according to Mutlaq Al-Morished, chair-man of the board of directors of Saudi Kayan Company and executive vice president, SABIC corporate fi nance.

“Implementation works are well on track and basic units operation is expected by second half of 2010,” Al-Morished said. “We have completed 90% of the EPC works,” he added.

Meanwhile, Al-Morished revealed that his company is completing studies to replace choline chloride and dimethyl formamide with other products including natural and synthetic butanol for detergent, isobu-tanol and butanol to increase

the profi tability of the company, Al-Morished revealed.

The company was initially supposed to produce 4 million metric tonnes of petrochemical and chemical products includ-ing 20 000 t/y of choline chlo-ride and 50 000 t/y of dimethyl formamide.

SABIC holds 35% of the com-pany’s capital; Al Kayan holds the remaining 20%. 45% is listed in the Saudi stock exchange.

Kayan will boost SABIC’s production output

Takreer signs $9.6bn EPC contractsAbu Dhabi Oil Refi ning Company (TAKREER ) has signed EPC agreements worth US$9.6 bil-lion with four Korean companies to expand its oil refi ning capacity in Ruwais.

The EPC works cover fi ve main packages of the expansion project, which will increase the refi ning capacity of TAKREER of crude oil to 417 000bpd and nearly double its production of transportation fuels, gasoline, jet fuel and diesel by 2013.

The agreements were signed with M/s SK Engineering and Construction Company for the crude oil distillation and associated down-stream units package, M/s GS Engineering and Construction Corporation for the residue fl uid catalytic cracking unit and associated refi ning units and marine facilities packages, M/s Samsung Engineering for the offsite and utilities package and M/s Daewoo engineering

EPC works cover five main packages which will double company’s production capacity

Takreer awarded the five packages in November 2009.

BUILD&PROJECTS

Daelim scoops Sahara deal MMG signs LoI

with DaelimSahara Petrochemicals and Sau-di Mining Company (Ma’aden) signed an agreement to start engineering and preliminary construction works with South Korean contractor Daelim to ini-tiate a caustic soda and ethylene dichloride project.

The project will be located in Sahara PCC complex in Jubail. “The fi rst phase is expected to cost US$41m covering the fi rst nine months and will be followed by the signing of the EPC contract,” said Esam Fouad Himdy, managing di-rector of Sahara.

The caustic soda and ethyl-ene dichloride is a 50-50 joint-venture between Sahara PCC and Saudi Arabian Mining Company (Ma’aden) using German UHDE technology. “The construction of the project will be completed in the third quarter of 2012,” he added.

Mohammad Al-Mojil Group has signed a letter of intent with Saudi Daelim Company to conduct me-chanical works for parts of Al Jubail refinery project, owned by Aramco.

Al-Mojil Group will also sup-ply Daelim with labour force and machinery for part of the project which is located in Al-Jubail Indus-trial City 2.

“The total cost of the contract is US$44m,” said a source close to the company. “We expect to start exe-cuting the special works in H1 2010, and completing it by 2012”.

Saudi-based Mohammad al-Mojil Group (MMG), is a contractor spe-cialising in oil and gas and petro-chemicals projects, and has signed many contracts to undertake several subcontractor works for different petrochemical projects in Saudi.

and construction for the tankage and associ-ated interconnecting piping package.

The project will be integrated with the neighbouring petrochemical industry through exporting 1.1.Million t/y of propylene to the Borouge Olefi ns Complex in Ruwais. “This will result in saving investment cost and reduce

operating cost to the benefi t of both operating companies,” the company said in statement. “It also aims to meet the growing local demand.”

TAKREER currently operates at 490,000 bpd name plate capacity at its two sites in Abu Dhabi and Ruwais.

The process confi guration consists of 21 ma-jor process units with supporting offsite and utilities units. Latest technology to reduce the carbon footprint has been incorporated en-abling TAKREER to become an environmental pacesetter in future.

The centerpiece of the project is the residue fl uidised catalytic cracking unit; at 127,000 bpd, the largest of its kind under construction. The scheme was selected to profi tably upgrade the bottom of the barrel and to maximise pro-pylene production for capturing the benefi ts of integrating with petrochemicals industry.

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

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Sharq to shutdown its LLDPE facilitiesSaudi Arabia’s Eastern Petro-chemical Company (Sharq) is expected to shut down its linear low density polyethylene plant for maintenance starting from early April.

The company will close its two LLDPE facilities for 14 days to undertake the scheduled mainte-nance. The capacity of each plant is 375 000 tonnes per year.

The company started commis-sioning its third expansion proj-ect last November. Phase three output is slated to include 1.3

million tonnes each year of eth-ylene, 400 000 tonnes per year of high density PE (HDPE) and 400 000 tonnes per year of lin-

ear low density PE (LLDPE) and 700 000 tonne/ year of ethylene glycol (MEG).

The annual production capac-ity of the complex will reach 5 million tonnes per year, includ-ing the largest single MEG pro-duction facility in the world.

Sharq is a 50-50 JV of SABIC and Saudi Petrochemical Devel-opment (SPDC). SPDC is owned 45% by Japan Bank for Interna-tional Cooperation (JBIC), and 55% by 62 Japanese companies, mainly of the Mitsubishi group.

Sharq is a JV between SABIC and SPDC.

450 000 t/yAPC’s annual polypropylene

production capacitySource: APC annual report

APC polypropylene plant goes offlineAdvanced Petrochemical Compa-ny has closed its facility located in Al-Jubail industrial zone for three weeks to conduct mainte-nance work starting from 10th of March, the company has said.

“The plant will remain shut for about three weeks. During the turnaround, there will also be a catalyst change at the PP plant,” a source from the company said.

The company produces 450 000 tonne/year of polypro-pylene (PP), and 450 000 tonne/year propane dehydrogenation (PDH). The PDH is used as feed-stock for the PP plant.

The scheduled maintenance will not affect the sales of the company during this period.

The scheduled turnaround works will not affect the company’s polypropylene sales

APC salls about 60% of its product in Asia, 35% in the Middle East and 5% in Europe, it produces about 112 000 tonne every quarter.

SABIC schedules EG maintenanceSABIC has scheduled maintenance periods for its ethylene glycol (EG) lines in the second quarter and the fourth quarter 2010.

The concerned plants are Eastern Petrochemical (Sharq 3) 450 000 t/y unit in Al Jubail, Saudi Yanbu Petrochemical (Yanpet) of 530 000 t/y plant and Jubail United Petro-chemicals 700 000 t/y plant; the maintenance of these plants to take place between April and May.

Meanwhile, Sharq 2 plant, which produces 450 000 t/y of ethylene glycol, is scheduled for Q4.

OPERATIONS&MAINTENANCE10

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Page 13: Refining & Petrochemicals Middle East - April 2010

Emerson boosts servicesEmerson Process Manage-ment has expanded the reach of its fl ow metering management services, METCO, to Dubai.

“These new services help companies manage their fi scal, allocation, and environmental mea-surement infrastructure through the provision of software, audit and consultancy services, fi eld technicians, and offi ce based engineers,” the company said.

“Our experienced engineers, auditors and technicians will offer both offsite and onsite support in the region, performing audits and health checks of metering systems as well as offering a range of train-ing courses to improve the skills and competencies of our custom-

ers’ own maintenance and operations teams,” said Mark McCready, business

development manager for Emerson’s METCO.

Emerson’s total me-tering management contracts guarantee to deliver timely, accu-

rate data on its clients’ process throughput. Key per-formance measures are agreed upon up front to ensure the sys-tems are managed according to the clients’ business drivers.

Emerson build an exit strat-egy in to some TMM contracts, especially those in developing markets. The exit strategy in-volves training site personnel to take over the operation of the site’s metering facilities.

Carbon Holding selects UNIPOL techEgypt’s Carbon Holding has selected the Uni-vation UNIPOL process technologies license for its three PE plants, located in Ain Sokhna.

The plant has three production lines with a total capacity of 450 000 t/y, and will pro-duce HDPE using Univation Technologies’ single-reactor PRODIGY Bimodal Catalyst, while the two other swing lines will manu-facture LLDPE/HDPE and include the latest XCAT Metallocene Catalyst technology. “Our bid evaluation process focused upon technical

The PE plant has three production lines with a total production capacity of 450 000 t/y

e-heng,

software,

ers’ own maintenaoperations teamMark McCready,

development manEmerson’s MET

Emerson’s ttering manacontracts guardeliver timely

rate data on itsprocess throughput. K

SCIENCE&TECHNOLOGY

LyondellBasell launches Trans4m Sahara wants HP

for IT datacenterLyondellBasell Industries has ex-panded its licensing portfolio of olefi n recovery and conversion technologies.

The new Trans4m process tech-nologies offers tailored solutions for C4 and higher olefi n separation process requirements, as well as isomerisation and extraction.

“By expanding our portfolio of well-proven technologies to include a full range of olefi ns recovery and conversion processes, we offer li-censees a simplifi ed, modular ap-proach to achieving a complete so-lution,” said Kaspar Evertz, senior vice president, technology business – licensing. “Operators can util-ise any combination of Trans4m processes needed, enabling them to more effectively maximise the value of their olefi ns balance.”

Sahara Petrochemicals Com-pany has selected HP BladeSys-tem and HP ProLiant servers solutions to automate and op-timise its datacenter processes. The BladeSystem enclosure will allow the fi rm to consoli-date its server, storage, net-work, power and management capabilities. “When it came to selecting the right datacenter solution we found that HP so-lutions best met the require-ment of our IT infrastructure,” said Ihab Hawari, IT manager at Sahara Petrochemicals.

The deployment of the new technology is part of Sahara’s overhaul to support and meet its new growth targets.

reliability and commercial viability and we are very pleased to present the award to Univa-tion,” said Charles Garfi nkel, chief investment offi cer, Carbon Holdings.

“Univation is very proud to be the polyeth-ylene licensing partner in Carbon Holdings’ petrochemical project in Egypt. We have a long history of working to support industrial development through the licensing of PE pro-cess technology. Our overall experience in high capacity reactors, recognised cost synergies of

multiple UNIPOL PE Process lines and ongo-ing investment in technology are all key Uni-vation benefi ts to this project,” commented Cindy Shulman, president, Univation Tech-nologies, LLC.

Steven Stanley, commercial vice president, Univation Technologies, emphasised: “The UNIPOL PE Process’ well-proven commercial experience with 4500 00 t/y capacities and be-yond provides high-level assurance of opera-tional success and low technological risk.”

Custody measur-

ment is important.

Polyethelyne production is expected

to increase in the Middle East.

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

11

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VigilantPlant launchedOFI expands in the regionYokogawa Electric Corporation announced the release on of new VigilantPlant Services, the comprehensive package of au-tomation service solutions that help manufacturers achieve safe, environmentally friendly, and profi table plant operations in line with the Yokogawa Vigilant-Plant concept.

“From design through proj-ect execution, operations, and maintenance, VigilantPlant Ser-vices provide manufacturers the support they need to achieve op-

erational excellence over the en-tire plant lifecycle,” the company said in statement.

VigilantPlant Services help us-ers to achieve operational excel-lence by improving the effective-ness of automation platforms.

“Conventional maintenance and repair services are typically reactive in nature; in contrast, VigilantPlant Services take a proactive approach to mainte-nance that reduces the total cost of ownership,” Yokogawa Elec-tric said.

VigilantPlant Services helps users by improving the effectiveness of automation platforms.

Honeywell launches I/O transmitters Honeywell has added universal input/output (I/O) transmitters to its family of XYR 6000 wireless products.

The transmitters allow manufacturers to wirelessly monitor more plant points with fewer devices. By transmitting signals from up to three different types of inputs – including measurement devices with a high-level analog, temperature or milli-volt, or contact-closure switch input. “The XYR 6000 Universal I/O transmitters can help plants save up to 30% in costs over similar devices that can transmit signals from only two inputs,” the company said in statement.

“This XYR 6000 family of transmitters, which includes a version that can transmit up to two inputs and provide a local discrete

New devices complement other wireless transmitters in Honeywell’s XYR 6000 series

The device is ideal for applications such as pump status.

EQUIPMENT&MACHINERY

One For Instrumentation (OFI) and Induchem UK have formed a new company called Induchem Global Projects to serve their growing cli-ent list in the Middle East, said Ja-son Wakefi eld, managing director of One For Instrumentation.

“We will be bidding for more valve contracts across the Middle East through our network of agents. The new partnership means we have the full resources of both com-panies for the supply, installation and commissioning of valve and actuation packages for the oil and gas industry,” said Wakefi eld.

The company has also expanded

its presence in the region through appointing distribution agents. “We have spent a long time to set up our network of agents across the Middle East. This is a key market for our business and we feel we now have the right people in place,” explains Wakefi eld.

“We are now in a position to offer a one stop solution for all our customers instrumentation requirements,” says Wakefi eld. “In the eight years we have been in business we have gone from a simple gauge manufacturer to the ability to offer all products for fl ow, pressure, temperature and level measurement and control. The fu-ture looks bright,” he added.

The company has recently signed agreements with a number of energy companies across the Middle East including Qatar and Kuwait to supply them with differ-ent equipments including valves and fl ow meters.

output, is ideal for applications such as wire-lessly monitoring level switches, pump status and system alarms,” it added.

The devices also carry intrinsically safe ap-provals from FM Global and the Canadian Standards Association for use in hazardous areas. “More manufacturers are considering wireless monitoring to improve asset man-agement while saving costs, but convert-ing to a wireless infrastructure isn’t always easy,” said Raymond Rogowski, global prod-uct marketing manager wireless, Honeywell process solutions. “Devices such as the XYR 6000 Universal I/O Transmitter can ease the transition to wireless and help plants reap the overall safety, equipment reliability and pro-cess effi ciency benefi ts that come with it.”

Jason Wakefield, manager, OFI.

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

12

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SALES&SHIPMENTS

GulfNav buys four tankersGulf Navigation Holding signed an agreement with its partner Stolt-Nielsen to buy a total of four 44 000 deadweight tonne chemical carriers.

The Gulf Navigation joint ven-ture with Stolt Tankers, head-quartered in Dubai will own the four vessels and is scheduled to take delivery of the fi rst two ves-sels immediately while the re-

maining two will be delivered in June and July respectively. The four sophisticated tankers will be employed in the Stolt Tank-ers Joint Services and be techni-cally managed by Gulf Stolt Ship Management in Dubai.

These four quality vessels have an overall deadweight of 176 000 metric tonnes, and will carry clean refi ned products.

The four quality chemical vessels have an overall deadweight of 176 000 metric tonnes.

SABIC fixes April ACP of MEG pricesSaudi Arabia Basic Industries Corporation (SABIC) has fi xed Asian Contract Prices (ACP) of mono ethylene glycol (MEG) for April at US$1050 per tonne, which is the same level as March’s prices.

The current price level is al-most doubled compared to April 2009, when prices hovered at their lowest level of arround $540 per tonne.

MEG contract prices are gen-erally set by the three major players of the industry, which includes SABIC, MEGlobal and Shell Chemicals.

Shell rolled over its April ACP nominations at $1,100 per tonne

Current Asian prices of $1050 per tonne is almost double trading prices one year ago

SABIC is the largest MEG producer in the world with a production capacity of 5.345m t/y.

Arab Potash sells fertiliser to IndiaCristal ups TiO2

prices for AprilArab Potash Company and In-dian Potash have signed a con-tract to supply 600000 tonne of potash fertiliser to India over the period until March 2011 starting immediately. “This is the largest ever volume contracted between the two companies who have had commercial relations beginning in the mid-nineties,” the compa-ny said. The prices and terms of this sale are in line with market prices in India.

Cristal Global (Cristal) has an-nounced that it will increase prices on all of its anatase and rutile Tiona and Cristal titanium dioxide (TiO2) products sold in certain regions staring from April 1st.

In Europe the company said that it will increase the price by US$135 per tonne compared to March prices, while in the Middle East and Australia, it will be sold at $100 per tonne higher than March offers. Prices for the Asian mar-kets will be increased by $150 per tonne compared to March.

Prices for all Tiona and Cristal titanium dioxide (TiO2) products will increase by $100 per tonne.

Cristal Global, is a subsidiary of Saudi Tasnee, and it is world’s second-largest producer of tita-nium dioxide.

CFR Asia. Meanwhile, MEGlobal has nominated its April contract price for MEG for Asia at $1050 per tonne levels.

SABIC is the largest MEG producer in the world, with a production capacity exceeding 5.345million t/y, through 10 pro-duction units located in Al Jubail Industrial City and in Yanbu.

The company signed a deal last year with Dutch storage and terminal operator to rent MEG storage tanks at the port of Zhan-jiagang, in the eastern part of China, as it aims to improve the delivery of the products to end users, and reduce the delay in product deliveries.

Arab Potash is a Jordan based company.

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13

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Market Analysis14

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Between 2004 and 2008, the energy project Capex market was in a boom cycle with overambitious spending and the awarding of

projects that resulted in a severe resource crunch and greater than ever cost escalations. The market was clearly a seller’s market with some top tier EPC contractors being selective and turning down project work whilst the majority took the opposite road and overloaded themselves. This resulted in numerous project schedule and budget overruns as contractors were unable to cope with the project workload burden.Over the past year, however, we have seen the pendulum swing back towards the buyer. This is primarily as a result of decreasing contractor backlog and the postponement of many energy projects as project owners look to take advantage of the reduced input costs. Nevertheless, despite this shift, project owners are still faced with the challenge of how to identify, attract and secure the ‘best fi t’ contractors for their project at the right price.

Although some signs of global economic stabilisation have begun to emerge, there remains a great deal of uncertainty in the market with many companies fi nancially strained and thus more risk averse. In today’s market, contractors are more robustly assessing their opportunities against stricter criteria and are asking themselves key questions before bidding for a project, for instance:

• Project owner risk: Is this project owner reliable and committed to the project? Do they pay their bills on time? What are the

project owner’s capabilities in managing the project?

• Project cost risk: How are project costs evolving? How can we accurately forecast certain costs for projects due for award next year? Will the project owner be willing to share some of the risk with the contractors? If so, how?

• Execution Capability: Do I have the true capability to execute this project profi tability?

• Bidding costs: What is the estimated bidding cost? Are we really able to afford this bid cost given the other bids that we are putting together?

• Competition: Who else is bidding on this project? What are my chances of winning?

New Times, New Thinking for Project Owners

Estimated budget for new refi ning projects across the MENA regionSource: Organisation of Arab Petroleum Exporting Countires

$146bn

Kathleen Bury is director of market analysis. Wissam Batran is a consultant at Contax Partners.

Kathleen Bury and Wissam Batran from the Business Advisory team at Contax Partners explore the implications of a more conservative era of project ownership, including risk sharing mechanisms and incentive schemes

Realising the need to adapt to this changing contracting landscape and attract competent and quality contractors to their projects in a competitive bid environment, many GCC energy sector project owners have taken initial steps to share some of the project cost risk elements with their

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15Market Analysis

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

within their bid prices, by offering advanced payments, relaxing some of the terms and conditions and indemnifying the contractor of certain obligations. These steps enabled the project owners to decrease the EPC bid costs by 15-20%, a key economic target for any project.

Certain project owners have also taken the step towards holding direct negotiations with trusted EPC contractors with which they have worked with in the past. This strategy generally helps to reduce the time and cost associated with tendering a project on a competitive basis, which can considerably extend a project timeline and cost several millions of dollars. However, on the fl ipside, it can also exclude potential new

competitive players from the race. These risk sharing mechanisms and incentive schemes, tailored to each owner’s risk appetite, have in some respects signalled the development of a more balanced relationship between project owners and contractors, enhancing trust between the different parties. While this new balance can reduce risk premiums and increase project attractiveness to contractors, it also means that the project owner is taking on more risk; a behaviour which many contractors have been looking forward to seeing project owners develop.However, there are a number of other steps that project owners can and are taking to ensure that they identify, attract and secure the right contractors for their project:

1. Understand the trends in the market around key areas such as input costs, labour availability, the likely project awards and the ‘sweet spot’ for award - See Graph 1.

2. Robust benchmarking assessment of EPC contractors during PQ and bidding stages to identify and rank existing and new contractors against key attributes around competency, fi nancial health and capacity.

3. Further analysis of the project execution risks that are better managed by project owners vs. the contractor.

In conclusion, project owners are beginning to adapt to the changing project and contracting landscape in the GCC, by adopting ‘new times, new thinking’ contracting strategies that are more closely tailored to the nature of the project, to the contractor’s cash fl ow requirement and to their risk appetite. Doing so will contribute to helping them secure the contractors best fi t for the job at the right price. However, they will also be required to plan early mitigation strategies for some of the risks associated with this new strategy.

contractors and adopt incentive schemes. This does not mean moving away from the traditional lump sum turnkey (LSTK) form of contract, but rather the addition of some risk-sharing clauses and relaxation of some terms and conditions which were a signifi cant burden for contractors. A few projects in 2009 saw project owners take initiatives to attract contractors and ease their risk burden; on the recently awarded Plateau Maintenance Project, Qatargas offered to reimburse contractors for their associated bidding costs to increase the competitiveness of the project. Some project owners in Abu Dhabi and Saudi Arabia also took steps to reduce the risk premium levels that contractors include

Qatargas has offered to reimburse contractors for bidding costs to increase competitiveness on projects.

To further discuss how the Contax Partners Business Advisory team can help you plan for and execute your projects successfully, please contact Ann-Marie Carbery Antoun at [email protected]. We look forward to speaking with you.

Total GCC EPC Workload: Q1 2007 - Q4 2012Graph 1

Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012

Sweet Spot?

Execution Future Tier 1 Future Tier 2 Future Tier 3

Page 18: Refining & Petrochemicals Middle East - April 2010

Gas to Liquids Technology16

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

With sound environmental credentials GTL blended fuels could take the aviation market by storm. Qatar has taken an early lead and is using

GTL kerosene blend as fuel for its national carrier

GTL TAKES FLIGHT

16 Gas to Liquids Technology

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

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17Gas to Liquids Technology

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

17

Monetising the region’s ample gas reserves is a critical mission for local downstream producers, and gas to liquids

technology is transforming business opportunities and breaking into the fuels market, including jet fuel blends.

Through integrated petrochemical projects and gas to liquid plants local governments have started looking into different options to take advantage of the abundance of natural gas. Saudi Arabia has opted to go down the integrated petrochemicals and refi ning route,

providing producers with subsidised feedstock at the cost of $0.75 per million BTU. However, Qatar is leading the region in terms of its GTL projects. The small Gulf state has announced six major projects with foreign partners. “The Pearl GTL project with Shell will be the fi rst world-scale GTL plant,” says Alan Troner, president of Asia Pacifi c Energy Consulting.

Pearl GTL is an integrated project including the giant onshore plant but also the development of natural gas resources from the North Field (two platforms, 22 wells, pipelines to shore). “Pearl encompasses the whole chain from producing natural gas from the North Field to exporting high quality fi nished

“THE OPERATING COSTS OF PEARL GTL AS A WHOLE WILL BE $6 PER BARREL. THE INVESTMENT IN PEARL GTL IS $18BN-$19BN” ANDY BROWN, EXECUTIVE VICE PRESIDENT, SHELL

FIRST FLIGHT WITH GTL

Qatar Airways completed the world’s fi rst commercial passenger fl ight between Doha and Heathrow, powered by a fuel made from natural gas in October 2009. Shell developed and produced the 50-50 blend of synthetic Gas to Liquids (GTL) kerosene and conventional oil-based kerosene fuel.

Gas to Liquids Technology

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

products that create value for Qatar and Shell,” says Andy Brown, Shell’s executive vice president. The investment in Pearl GTL is $18bn-$19bn.

While in petrochemicals the cost of gas is critical to determine the profi tability of the project; in GTL, the cost of gas is relative to three factors explains Troner. “What NGLs (LPG and condensate) are gained from gas production, what is the premium that GTL-derived products can gain on quality over conventional products, and their blending synergies with condensate-derived product and GTL output, and will GTL be sold as higher value blendstock?” he says.

GTL producers can also capture and additional revenue stream through the

Page 20: Refining & Petrochemicals Middle East - April 2010

Gas to Liquids Technology18

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Pearl GTL will produce 140 000 bpd of GTL products in addition it will produce 120 000 bpd of natural gas liquids and ethane.

production of natural gas liquids. Also, the condensate produced with gas can be processed to provide basestock for blending fuels.

The Fischer Tropsch process, which is used to transform gas into liquid products, has been in use since 1920s. “Essentially you combine methane and oxygen to make hydrogen and carbon monoxide,” says Brown. “You then pass this over a proprietary catalyst to make long-chained waxy hydrocarbon molecules. Shell has spent over 35 years researching gas to liquids technology and during that time we have fi led over 3 500 patents,” he explains.

GTL plants not only add value, but are capable of producing output which can be sold or blended into refi nery stock as superior products with less pollutants for which there is growing demand. “With GTL, you can produce everything that a conventional refi ner can manufacture other than gasoline, as the naphtha yield is very highly paraffi nic (99% + paraffi ns),” explains Troner.

“Most GTL products, as they emerge in outturn have a specifi c quality problem which needs modifi cation through additives or by blending with conventional fuel. GTL jet fuel

traditionally failed on freeze point, but Shell claims to have overcome the issue,” says Troner. Another use for GTL fuels is in the manufacture of blended diesel fuels. “Automotive diesel oil (ADO) often was both too light and had lubricity problems where the fi rst you can overcome by blending, the second by using additives,” he adds. Since GTL-derived naphtha is so highly paraffi nic, it cannot be used for gasoline manufacture.

Pearl GTL will produce 140 000 barrels per day of GTL products. In addition it will produce 120 000 barrels per day of natural gas liquids and ethane. Qatar’s energy minister Abdullah bin Hamad Al Attiyah said recently that the Pearl GTL is almost complete, with major construction expected to be fi nished by the end of this year. Production will ramp up during 2011.

As the fi nal products of the GTL are liquid products, requirements to store or to transport these products are identical to conventionally-derived oil products. “You can use standard oil product tanks for your GTL outturn but paying careful attention to segregation and the fact that you do not want to contaminate this high quality GTL-derived products,” says Troner. “Condensate can be stored in standard crude or product tanks and like GTL can use standard tankers. LPG of course needs refrigerated or pressurized containment,” he adds.

GTL fuels offer lower harmful emissions than their conventionally-derived alternatives. Given the precedent set with the growing

GTL KEROSENE

The Pearl GTL project will produce around 1 million t/y of GTL kerosene starting 2012, enough to power a typical commercial airliner for half a billion kilometres (equivalent to carrying 250 passengers around the world 4 000 times) when used in a 50% blend to make GTL Jet Fuel. GTL Jet Fuel, with GTL kerosene up to 50%, was fully and unconditionally approved as safe for use in civil aviation by the American Society for Testing and Materials)

Qatar Petroleum GTL projects:

Oryx GTL ProjectPearl GTLSasol Chevron GTLExxonMobil GTLMarathon GTLConocoPhillips GTL

Andy Brown, executive vice president, Shell.

demand for LNG largely for stationary applications, demand for GTL fuels should be anticipated to grow fi rmly, notably for diesel fuels with the growing emphasis and legislation for low sulfur and aromatic fuels in Europe and the US.

The Pearl GTL project is expected to produce one million t/y of GTL kerosene starting from 2012.

But with all these promising outlooks, any future plans to establish a new GTL plant will need very large and wet gas reserves that are sold at a reasonable price to be able to create large-scale GTL. “This means a long-term commitment by the host country that will not change,” says Troner.

While Qatar is taking the lead in this domain, the obvious candidates are Iran, Nigeria and Russia. “All these countries have high political risk and an uncertain future energy policy on gas,” concludes Troner.

Page 21: Refining & Petrochemicals Middle East - April 2010

THE 3RD SAUDI ARABIA INTERNATIONALOIL & GAS EXHIBITION& CONFERENCE

DAMMAM, KINGDOM OFSAUDI ARABIA

10–12 OCTOBER 2010

WWW.SAOGE.ORG

Join the exhibitors of the largestoil & gas event in Saudi Arabia

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Page 22: Refining & Petrochemicals Middle East - April 2010

Gas Detection20

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.comRefining & Petrochemicals Middle East April 2010t wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwww ww wwww wwwwwwwww wwwww ww wwww .a.arar.ararrrrarararrrr.arrrrarararaararararar.aaara aaabbbbababiabibiabiabiabbabbibbababbiabbbbiaaaaaabbaaaaaabababiaaaaa iaaaa ia iabibib anaaaananananananaaaaaaaaaaanaaaaaaaaanaaaaaaaa ooooooioioiiloioillloillililloo llooililloilaaaaanaannnannnnndndndndndndndda daa dddddnnnndddannndndnddaaaannnnndnnnnannnnannnnndnnnnnnnnnndnnndanaannannndnnnnaanaannnna gasgagasgasgasgasgasasasasgasgasgasggagagaaagasggasasgasaassssa co.co.coco.coccococoococo.c.cococo.cocooco..c mmmmmmmmmmmmmmmmmmmmmmmmm

Safe operations in refi nery plants require cutting edge gas

detection equipment.

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

John Warburton,

City Technology.

Page 23: Refining & Petrochemicals Middle East - April 2010

21Gas Detection

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

protection against know specifi c hazards in a particular area of the plant or facility. “As they are life safety critical detectors, both types of instrument have to be independently certifi ed to meet international safety and performance standards, must beeasy to use, robust and reliable,” explains Warburton. “For portable instruments in particular, they must be ergonomically designed and lightweight so that they are easy and unobtrusive to wear.”

ThresholdsOccupational Exposure Limit (OEL) values are set by the relevant health and safety executive which has jurisdiction in the particular country or area or they are often defi ned in international standards. The limits depend on the nature of the hazard. “For toxic gases, a Time Weighted Average (TWA) will set the limit, typically over an eight-hour period, for prolonged exposure

to a low concentration of the gas in question,” Warburton. “In tandem

with the TWA, a Short Time Exposure limit (STEL) is usually

defi ned, setting the maximum

Millennium II series of gas detectors from Net Safety can cover more area with a single transmitter and mix and match all sensor types.

Camera’s are used to detect leakage

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safety and perforeasy to use, robusWarburton. “Forparticular, they mdesigned and ligheasy and unobtru

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“DEFINITIONS FOR MAXIMUM EXPOSURE CONCENTRATIONS OF TOXIC GASES VARY FROM COUNTRY TO ANOTHER” ANDY AVENELL, MANAGER, CROWCON DETECTION INSTRUMENTS

period for which people can be exposed to a higher concentration, usually measured over 15 minute intervals,” adds Warburton.

For potentially explosive atmospheres, limits are normally expressed as a percentage of the Lower Explosive Level, (LEL) the level above which a gas mixture is capable of combustion. “The

instruments will be programmed to alarm at a level well below the maximum

permissible so as to give time for evacuation or plant shutdown to be initiated,” explains Warburton.

There are many international standards which dictate the threshold.

“In the UK health and safety executive (HSE) publishes a document called EH40 which

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

Page 24: Refining & Petrochemicals Middle East - April 2010

Gas Detection22

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

defi nes the workplace exposure limits (WELs) for toxic gases,” says Avenell. “In the US OSHA (occupational safety and health administration) publishes permissible exposure limits (PELs). Both standards are referred to in the Middle East depending on country and client,” he adds.

Environmental factorsThe key requirements for any gas detection instrument are the ability to operate within acceptable tolerances over wide variations in temperature and humidity. “Environmental factors relating to sensor performance, legacy and future system requirements, approvals and certifi cations required within the installation, and true cost-of-ownership are the main elements

that buyers should look when adopting a gas detector,” says Jonathan Saint, manager at Net Safety. The performance of any instrument can only be as good as the performance of its core sensors; hence the segmentation of the market into specialist sensor designers and manufacturers and instrument providors.

“Globally, the oil and gas and petrochemical industry is responsible for around 40 - 50% of demand for fi xed and portable gas detectors,” says Warburton.

In the Middle East, given the signifi cant concentration of production and downstream facilities in the region, the petrochemicals industry is by far the largest user of such equipment. “

Changes in demand for gas detectors from the industry are directly related to activity levels – the more oil that is being pumped and processed, the larger the number of people needed to implement the processes and the higher the requirement for safety equipment,” he explains.

As more plants come onstream in the Middle East, gas detector providers remain excited by the opportunity landscape in the region. “There is still a lot of activity here, and we provide vital tools,” says Saint.

The energy and refi ning sector accounts for around half of all regional gas detector sales. Source: City Technology report.

50%

Johan Tegstam, product manager, FLIR Systems.The 4CF+ carbon monoxide sensor and the 4HS+ hydrogen sulfi de sensor provided by City Technology.

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dioxide (NO2), sulphur dioxide (SO2) and

oxygen (O2).

Page 25: Refining & Petrochemicals Middle East - April 2010
Page 26: Refining & Petrochemicals Middle East - April 2010

Multipoint Temperature Profi ling24

Multipoint assemblies enable 3D temperature profiling of process reactorsMMulltipoint assseemmbblies enaable 3D temperattuureee proofiling of process reactttorrss

REACTOR WATCHA

range of multipoint temperature assemblies is now available from Okazaki manufacturing Company (OMC), which is suitable for all

types of process applications, including crude oil storage tanks, hydrocarbon cracking units, chemical reactors and desulphurisation catalyst bed reactors.

Most catalyst bed reactors operate at very high pressures and temperatures, making the vapour generated potentially very dangerous. The design of the reactor and multipoint temperature assemblies are therefore critical to safe plant operation. The reactors are between 3m and 6m in diameter, and are between 10m and 40m

high. For optimal process operation, the temperature needs to be controlled and monitored accurately and fast, as well as three-dimensionally at multiple pre-set levels within the reactor catalyst filling. It is therefore preferable to have a minimum number of entry nozzles, or to utilise existing nozzles when upgrading.

Multipoint Temperature Profi ling24

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Page 27: Refining & Petrochemicals Middle East - April 2010

25Multipoint Temperature Profi ling

“For chemical reactors and desulphurisation catalyst bed reactors, OMC’s AerOradial range of multipoint temperature assemblies is ideal. This assembly offers the maximum number of temperature measurement points through a single process connection or entry nozzle,” explains Chris Chant, business development manager at Okazaki Manufacturing Company.

“OMC utilises its own AerOpak mineral insulated cables, providing single tip measurement or multiple sensing points within a single stem. This enables full, three-dimensional temperature profiling, which ensures safe control of the process with a fast thermal response,” says Chant.

Assemblies can be positioned through the side, top or bottom of the reactor vessel, with adjustable spacers for catalyst tubes or with an optional mounting system for fitting to the reactor.

To ensure the pressure seal is maintained on the assembly, OMC uses a special welding technique known as ‘orbital seal welding’. Here, the sensors are welded into custom-designed pressure containment chambers. These chambers can be fitted with pressure gauges or transmitters, which indicate any safety problems such as a primary seal failure.

“Our range of multipoint temperature assemblies is comprehensive and all designed and manufactured in our Japanese plants. Most of the units we supply are in stainless steel, but we also offer assemblies in exotic materials such as Alloy 600, 625, 825 or Hastelloy X. Some of our designs are fitted with smaller diameter sensors or a thin-walled guide tube and machined tips, to enable the sensor to be replaced while the process is

still running, minimising production downtime for the customer. We even offer full site supervision of the installation if the customer requires this.”

OMC multipoint temperature sensors and termination glands are fully certified as a combined pair to Exde IIC T6 standards, for termination into a suitable enclosure, which can be mounted directly on top of the assembly or remotely at a more suitable attachment point.

OMC’s range of multipoint temperature assemblies also includes standard multipoint assemblies for storage tanks and vessels. Depending on the customer application, multiple special features can be added to the standard unit to improve

the safety, interchangeability, response times and accuracy of the assembly. Typical assemblies include guide tube systems and heat transfer blocks. Flexible versions are also available for installation around bends and can be fitted from the underside of tanks.

Middle East FocusChant says that whilst the recessionary period saw local project schedules slow down, activity in the Middle East remains rampant compared to other markets worldwide.

“Ultimately refineries and chemical plants are still working, and from a maintenance point of view these overhaul or upgrade projects must go ahead whatever. In this region we did see a lot of slow-down on the big projects – crucially not cancelled, but slowed considerably,”

Whilst big-ticket projects have been pushed through in the Middle East, Okazaki’s customer profile has undergone a considerable shift in recent years.

“You only have to go back a few years ago and we would have expected to do most of our business from the traditional big American and European contacting firms, but that has definitely shifted more towards the South Korean companies,”

Thanks to major downstream projects in the United Arab Emirates and Saudi Arabia, Chant says the region is phenomenally busy. There are some great projects ongoing in the Middle East, such as the Ruwais Refinery Expansion (budgeted at around US$9.6 billion), so the region is certainly still exciting and buoyant,” he concludes.

“YOU ONLY HAVE TO GO BACK A FEW YEARS AND WE WOULD HAVE EXPECTED TO DO MOST OF OUR BUSINESS FROM THE TRADITIONAL BIG AMERICAN AND EUROPEAN CONTACTING FIRMS, BUT THAT HAS DEFINITELY SHIFTED MORE TOWARDS THE SOUTH KOREAN COMPANIES” CHRIS CHANT

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

SNAPSHOTOkazaki Manufacturing Company (OMC) was founded in 1954 and started the design and manufacture of temperature-related products in Kobe, Japan. In 1963, OMC developed Resiopak, a metal-sheathed MgO insulated resistance thermometer now used for temperature measurement within the petrochemicals industry globally.

Temperature monitoring is crucial for effi cient operations.

Page 28: Refining & Petrochemicals Middle East - April 2010

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Middle East Downstream Week26

Meeting Euro 5 standards and operating effi ciently drove the agenda in Abu Dhabi

Middle East Downstream Week (MEDW), organised by World Refi ning Association, attracted major regional players who

fl ocked to Abu Dhabi to discuss the major issues and challenges facing the refi ning and the petrochemical sectors.

The event was also an opportunity for international technology providers, software and EPC contractors to showcase their latest products and solutions, as well as to network with decision makers of the NOCs.

Delegates from Saudi Aramco, Abu Dhabi Oil Refi ning Company (Takreer) and Abu Dhabi National Oil Company (ADNOC),

“ONLY 23% OF THE ANNOUNCED REFINING PROJECTS IN THE ARAB WORLD ARE ACTUALLY UNDER CONSTRUCTION” IMAD NASSIF MAKKI, OAPEC

Kuwait Oil Company, Bahrain Petroleum Company (Bapco) and other delegates from different countries of the Middle East gathered in the UAE capital.

Meeting the Euro 5 standards, which dictate the reduction of sulphur content to 10ppm in diesel and gasoline, was the common issue facing refi nery operators in the region; while other speakers focused on the refi ning sector in different Middle

Eastern countries, with country specifi c presentation from Saudi Arabia, Bahrain, UAE and Iraq.

In his presentation on refi ning investment in arab countries, Imad Nassif Makki, petroleum refi ning expert from the Organisation of Arabic Petroleum Exporting Countries (OAPEC), presented a paper on the challenges facing refi ners in the Middle East. “Arab refi ning capacity represents 8%

Saadalla Al Fathi,

independent oil consultant, Iraq.

DOWNSTREAM WEEK

Mohamed Hassan Mezal, manager, Bapco.

Page 29: Refining & Petrochemicals Middle East - April 2010

27

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

Middle East Downstream Week 27

the world’s total capacity,” he said. “Replacing low effi ciency and simultaneously meeting growing demand whilst maximising high value products are the principal challenges for local refi ners,” he noted.

Makki said that 51% of the announced refi ning projects in the Arab world have been delayed, while 26% have been shelved. “Only

23% of the Middle East’s proposed refi ning projects are under construction.”

Mohamed Hassan Mezal, manager of the refi nery operations planning at Bapco, gave an insight into the refi ning operations at his country, where he raised the issue of meeting the Euro 5 standards within Bapco’s refi nery in Bahrain. This is a particularly

www.arabianoilandgas.com

accute challenge for Bapco as 90% of the company’s products are destined for export to international markets.

Delegates from Saudi Arabia discussed government initiatives to increase the use of diesel in the domestic market “The absence of incentives and the low cost of benzene in Saudi Arabia are the main reason behind low

’s proposed refining accute challenge for Bapco as 90% of thethe world’s total capacity,” he said.

Technology providers fl ocked to

the Abu Dhabi event.Salem Shaheen, president and CEO of SATORP.

Page 30: Refining & Petrochemicals Middle East - April 2010

Middle East Downstream Week

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

28

diesel penetration in transportation,” said a delegate from Saudi Aramco.

“In Aramco, we are working on increasing the utilisation of diesel instead of benzene,” he added. Salem Shaheen, president and CEO of Saudi Aramco Total Refi ning and Petrochemical Company (Satorp), said that by 2014 diesel produced in the Kingdom will be of 10 ppm instead of the current 500 ppm. “Most of Aramco refi neries will be producing 10 ppm quality diesel,” he said.

Shaheen also revealed that Aramco decided that all new refi ning projects should be integrated projects, which include petrochemicals and refi nery plants on the same site to increase profi tability.

Saadalla Al Fathi, and independent oil consultant and former advisor of Iraq’s Ministry of Oil, spoke about current and propsed Iraq refi nery development. Al Fathi noted that among the four announced new refi neries, only two are likely to go ahead. “Kirkuk and Misan refi neries won’t see the light of day,” he said. “Iraq needs a master

plan for modernisation and expansion of its refi nery industry, but the proposed private investment law doesn’t give the necessary incentives for investors,” Al Fathi said.

On the other hand, technology and EPC contractors presented the latest solutions and technology options that help companies

to run more effi ciently. “Overall the Middle East Downstream Week event was a great opportunity for networking, and discovering new opportunities within the refi ning and petrochemical sector,” said Yassir Ghiyati, sales manager at catalyst specialist Haldor Topsoe.

n and expansion of its to run more efficiently “Overall the Middle

Imad Nassif Makki, OAPEC.The event was an opportunity to

network with industry peers.

Delegates from major NOCs attended the event.

Page 31: Refining & Petrochemicals Middle East - April 2010

C

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Page 32: Refining & Petrochemicals Middle East - April 2010

Number Cruncher30

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Price on Feb,19th (US$ per share)

Price on Mar,19th (US$ per share)

Change %

Saudi Basic Industries Corporation (SABIC) 23.73 25.80 8.01

Saudi Arabian Fertilizer Company (SAFCO) 36.40 38.33 5.04

Saudi Kayan Petrochemical Company (Kayan) 4.88 5.05 3.43

Rabigh Refi ning and Petrochemical Company (Petrorabigh) 8.80 9.33 5.71

Yanbu National Petrochemical Company (YANSAB) 9.97 9.47 -5.32

National Industialization Company (TASNEE) 7.52 7.71 2.42

Saudi Industrial Investment Group (SIIG) 5.88 5.81 -1.15

Saudi International Petrochemical Company (SIPCHEM) 6.16 6.33 2.74

Sahara Petrochemical Company (SAHARA) 5.65 5.89 4.13

Advanced Petrochemicals Company (Advanced) 6.28 6.03 -4.20

Nama Chemicals Group (NAMA) 2.64 2.79 5.26

Alujain Corporation (ALUJAIN) 4.49 4.59 2.11

Methanol Chemicals Company (CHEMANOL) 4.04 4.23 4.42

Petrochem 4.13 4.08 -1.31

Price on Feb,19th (US$ per share)

Price on Mar,19th (US$ per share)

Change %

Qurain Petrochemical Industries Company (AL-QURAIN) 0.71 0.70 -1.00

Boubyan Petrochemical Company (BOUBYAN) 1.79 1.96 8.93

Ikarus Petroleum Industries (IKARUS) 0.47 0.51 8.22

Price on Feb,19th (US$ per share)

Price on Mar,19th (US$ per share)

Change %

Industries Qatar 30.13 30.74 1.99

Price on Feb,19th (US$ per share)

Price on Mar,19th (US$ per share)

Change %

Oman Chlorine S.A.O.G. (CHLORINE) 1.01 1.02 0.26

Price on Feb,19th (US$ per share)

Price on Mar,19th (US$ per share)

Change %

Abu qir Fertilizers 41.67 40.00 -4.17

Sidi Kerir Petrochemicals Company 2.32 2.44 5.04

Downstream Data

Number Cruncher30

Most listed petrochemical companies saw share prices improve through March. Recovering demand from Asia is starting to filter through to better expections.

LISTED COMPANIES IN THE SAUDI STOCK MARKET

LISTED COMPANIES IN THE KUWAITI STOCK MARKET

LISTED COMPANIES IN THE QATARI STOCK MARKET

LISTED COMPANIES IN THE OMANI STOCK MARKET

LISTED COMPANIES IN THE EGYPTIAN STOCK MARKET

Page 33: Refining & Petrochemicals Middle East - April 2010

31Number Cruncher

Refining & Petrochemicals Middle East April 2010www.arabianoilandgas.com

31

Source: www.argaam.com

07/0

1/09

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820

920

1020

1120

1220

1320

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US

$/t

on

ne

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1400PROPYLENE (FOB FAR EAST)

US

$/t

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ne

07/0

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3/10600

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750

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850

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1050

1100PVC (CFR FAR EAST)

US

$/t

on

ne

350

400

450

500

550

600

650

700

750

800

850

07/0

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NAPTHA (CRF FAR EAST)

US

$/t

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ne

07/0

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3/10400

500

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1100MEG

US

$/t

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ne

07/0

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1450HDPE (CFR FAR EAST)

US

$/t

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ne

(HDPE Injection)

07/0

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1350ETHYLENE (FOB FAR EAST)

US

$/t

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ne

FOB: Freight On Board

07/0

1/09

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1100BENZENE (FOB FAR EAST)

US

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ne

CFR: Cost and Freight

Benzene prices fi rmed up during March at around $950 per tonne amid slight increases in crude values to above $80/bbl.

Ethylene prices dropped to around $1100 per tonne as buyers held off contracts to ascertain the impact of new cracking capacity in Southeast Asia which has recently come on stream.

MEG prices bounced back to the level of $900 per tonne. Trades remain thin on the ground as sellers hung on for richer pickings in Q2.

Propylene prices edged higher to above $1260 per tonne as supply was limited.

Polyethylene prices declined to below $1300 per tonne due to the decline of the ethylene feedstock, and the uncertainty of the outlook of the PE prices.

Polypropylene prices remained stable at around at around $1300 per tonne, as traders assessed the impact of the new capacities coming from the Middle East on the market.

PVC posted marginal gains reaching $1040 tonne, with further gains expected in April.

Page 34: Refining & Petrochemicals Middle East - April 2010

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Despite an awkward clash with Downstream Week in Abu Dhabi, The 13th edition of Dubai Plast Pro managed to draw a strong turnout

from regional producers and plastics converters from across Europe and Asia. Though attendance was down 30% on last year’s event the conference sessions and panel discussions remained as strong as ever.

Petri Lehmus, innovation center manager at Abu Dhabi’s Borouge, raised the issues of innovation and growing the plastics packaging industry in world. “In the less developed world, up to 50% of all food is

wasted between harvest and home. In a packaging-oriented society, wastage is reduced to around 3%,” he said.

Recent proposed legislations in the UAE and Oman to ban the use of plastic bags was discussed. Most producers felt their product was being blamed, when in fact behavior and education should be the solution.

The exhibition element saw Turkish petrochemical distributor Bayegan Group showcasing its services, and touting its ambitions to bring 70 years of experience to the Middle East. “The event is an excellent place to network with all the delegates and

Scheduling clash blamed for poor turnout, though international visitors hailed show’s quality

DUBAI PLAST PRO 2010

explore new investment opportunities,” said Ruya Bayegan, a company board member.

DON’T MISSEvent: Petrotech 2010Date: 23– 26 MayLocation: Bahrain International Exhibition CentreCovering: Downstream challenges, fi nancing, market changes and technology

Bob Davies, sales manager, Akzo Nobel.

Refining & Petrochemicals Middle East April 2010 www.arabianoilandgas.com

Ruya Bayegan, board member of Bayegan Group. (Left to right) Peter Steylaerts of Ineos, Ibrahim Shahbahai of PetroRabigh, Fahad Al-Matrafi of APC.

The panel fostered debate in the plenary sessions. Giangi Townsend, AsiaTek Industrial Packaging.

Downstream Diary32

Page 35: Refining & Petrochemicals Middle East - April 2010
Page 36: Refining & Petrochemicals Middle East - April 2010

OKAZAKI MANUFACTURING COMPANY, EUROPEAN OFFICE : Ashwood House, 66 Cardiff Rd, Glan-Y-LLyn, Taffs Well, Cardiff, CF17 7AF, Wales, UK

Tel: +44 (0) 2920 814 333 | Email: [email protected] | www.okazaki-mfg.co.uk

Okazaki designs and build

electric process heaters to

meet your specific application

and requirements. Our design

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Represented in the Middle EastBy Petro Middle EastPO. Box 802, Abu DhabiTel: +971 2 6212140 Email: [email protected]