Refining & Petrochemicals Middle East - June 2010

An ITP Business Publication, licensed by Dubai Media City

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

NEWS 05 | BUILD & PROJECTS 08 | SCIENCE & TECHNOLOGY 11 | TANK FARM TECH FOCUS 34 | FACE TO FACE 40

An ITP Business Publication, licensed by Dubai Media City

THE KINGDOMINTEGRATED REFINING HOLDS DOWNSTREAM KEY FOR KSA

TECH PARTNERSHIPSLYONDELLBASELL’S MODEL AT WORK IN THE MIDDLE EAST

AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES JUNE 2010

GDOMREFINING HOLDS

AM KEY FOR KSA

RTNERSHIPSSELL’S MODEL AT E MIDDLE EAST

DOW’S DEALMAKER

An AnAn An AnAn An An An ITPITPITPITPITPITPPITPPITPITPI Bu Bu Bu BuBu Bu Bu Bu Businsinsinsinsinsinsinsinsinessessessessessessessessesss Pu Pu PuPu PuPu PuPuPuuuPublibliblibliblibliblibliblicatcatcatcatcatcatcatcatcatc ionionionionionionionionionon l,l,l, l, l, l, ll, l, liceiceiceiceiceiceceici nnnnnsensenn eensn d bd bd d y Dy DDDDubaubaubauu i Mi MMMediediediediediddd a Ca Ca Ca CCa Ca CCCityityityityityityityty

Markus Wildi, president of The Dow Chemical Company in the Middle East says international partnerships can thrive with the right chemistry

28 SAUDI ARABIA PROFILEAn abundance of feedstock and strong governmental will is help-ing petrochemicals producers in the Kingdom to increase its stand-ing as a global downstream leader.

31 SABIC 2020A close look on the operations of the giant petrochemical producer in the Middle East, SABIC, and its 2020 vision.

34 STORING SAFELY Storage tank farms are critical facilities within any downstream complex, RPME investigates new build challenges in the region.

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

40 FACE TO FACE Meet Art Townsend, CEO of AsiaTek.

5 REGIONAL NEWSKuwait may decide on building refi nery by year end • Qatar Pet-rochemical industry all set for expansion• New CEO for Tacaamol.

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

14 NEW VISION IN THE REGIONMarkus Wildi, president of Dow in the Middle East, talks to RPME about how Dow is enforcing its presence in the region.

20 ADDING VALUERPME travels to Germany to see how LyondellBasell’s innovative technologies are helping producers in the Middle East.

June 2010 Volume 03 Issue 06IN PRINT

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1Contents

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

Online2

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

Ras Laffan Terminal Operations (RLTO), part of Qatargas Operating Company has celebrated the loading of its 1000th LNG cargo.

arabianoilandgas.com

The Kuwait Petroleum Corporation (KPC) is seeking to involve private sector in the ownership and management of some oil activities in Kuwait.


JUNE EVENTS ROUNDUPONLINE GALLERY

The online home of:

P

1 11 Saudi companies convicted of oil smuggling

2 Chakib Khelil ousted as Algeria’s Energy Minister

3 Saudi Aramco president warns staff to stay prudent

4 US$4.3 billion procurement phase opens for Nabucco

5 KPC may allow private sector to run oil activities

Shell has confi rmed it is in discussions with third parties as part of a review of ownership options for most of the company’s liquefi ed petroleum gas (LPG) businesses.


Kuwait Oil Company (KOC) plans to invest between US$17bn to $24bn in a range of hydrocarbon projects in the coming fi ve years, these projects aim to


EDITOR’S CHOICE

REFINED AMBITIONExclusive interview with Faisal Al-Suwaidi, CEO of Qatar Gas


WEB FORUM

Petrotech 2010 in picturesExclusive picture gallery meets the region’s leading refi ning and petrochemical playmakers from the Bahrain event in May.


BREAKING NEWS AND VIEWS FIRST

MOST POPULAR NEWS

ONE THOUSAND CARGO MILESTONE MET AT RAS LAFFAN

KUWAIT OIL COMPANY TO INVEST $24BN IN ENERGY PROJECTS

SHELL SCOUTING FOR BUYERS OF ITS LPG BUSINESS

KPC MAY ALLOW PRIVATE SECTOR TO RUN OIL ACTIVITIES

GPCA Plastic SummitArabianoilandgas.com brings you an overview of the fi rst GPCA Plastics Summit, which will be held in Dubai from 14th - 16th June.


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DEBATE


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A close look at the APIC conference in India

T he Asia Petrochemical Industry Conference (APIC) held last month in Mumbai, India, was an excellent opportunity for me to draw some comparisons with industry events organised in our region.

While conferences in both the Middle East and Asia attract plenty of delegates from different parts of the world, networking at the APIC was diffi cult compared to events in the Middle East. I found this especially true when trying to fi nd a specifi c delegate from a specifi c company.

Another thing I noticed was the limited number of exhibitors present at the APIC. And the majority of these exhibitors were either information providers or consultancy companies, with service providers noticably absent. These seem to prefer conferences held in the Middle East.

The APIC offered participants a plethora of different sessions, featuring numerous speakers addressing a multidude of different subjects. While such

choice is to be welcomed, it also made it impossible to attend all the sessions on the agenda. There was usually more than one

session being held at any one time, and often I couldn’t help but feel that I was missing out. Sometimes less is more.

One of the positive aspects at the APIC was that it was easy to learn more about the growth prospects of the different Asian countries. Industry organisations from major

Asian countries readily distributed booklets bristling with numbers and facts on the petrochemical industry in each

country. If the members of the GPCA followed this example at the next GPCA forum, it would greatly

enhance our knowledge of the Middle Eastern petrochemical industry.

Abdelghani Henni, editor e-mail: [email protected]

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What do you expect the Q2 fi nancial results of the region’s listed petrochemical companies

Comment4


Majors exit downstream businessNews

The refi ning sector around the world seems to be far from rosy compared to its petrochemical brother, as international compa-nies are divesting their refi ning investments. US major Conoco-Phillips announced in April it was pulling out of its planned 400 000 b/d joint venture Yanbu’ export re-fi nery project with Saudi Aramco. “The quality of Saudi Aramco as a partner and signifi cantly reduced capital costs from the recent re-bidding process made it a very diffi cult decision for us,” said Wil-lie Chiang, ConocoPhillips’ senior vice-president, refi ning, marketing and transportation. “We ultimately decided this project was not con-sistent with our current strategy to reduce our downstream footprint around the world,” he added.

In May, Shell confi rmed it is in discussions with third parties as part of a review of its many lique-fi ed petroleum gas (LPG) business-es. The preferred outcome of the review is the sale of the Shell Gas (LPG) businesses worldwide.

In addition to this announce-ment, Shell has confi rmed down-stream reviews in Finland, Sweden and Africa, proposed sales in Ger-many and the UK, and completed sales in France and New Zealand.

Greater risk when market is squeezed in refi ned products is blamed to be the reason behind this divetissement, as refi ners get their profi ts from price difference between crude oil value and refi ned

ConocoPhillips and Shell shift their business away from downstream investments

product prices. “If the cost of the crude is US$80 per barrel and the refi ning cost is $20, while the price of equivalent barrel of refi ned prod-uct (like diesel) in the market is $105, the refi nery profi t in this case is $5,” said Dr Ahmed Al-Mazroui, petrochemical analyst at the Saudi based Alpha Beta company. “But if the price of the refi ned product in the market is $95, the refi nery in this case post losses of $5.”

This profi t margin depends on different factors including world’s production capacities, operating rate of refi neries, as well as demand on refi ned products. “Depending on these factors, profi t margins fl uctu-ate between positive and negative,” he explained.

Historically, the refi ning sector witnessed its bonanza in the last decade, mainly in the years 2006-2008 which has been referred to as “the golden age” for refi neries, due to sustained high profi t margin. But these profi ts margins vanished dur-ing the credit crunch, and reached their lowest levels during 2009 and the beginning 2010. “Compared to petrochemical products which showed price increase, refi ned product prices didn’t rise due in part to the extra refi ning capacity which exceed 4 million barrels per day,” observed Dr Al-Mazroui.

There are many international indicators that measure profi t mar-gins of international refi neries; one of the main indicators is British

Petroleum’s (BP) GIM (Global In-dicator Margin) index, which mea-sures profi t margin of different re-fi neries operated by BP in different locations around the world and use different crudes. The index showed that margins has reached its lowest level in the fi rst quarter 2010.

According to the historical data, GIM reached an average between 7 and 15 US$ per barrel during 2007 and 2008.

Risk associated to refi ning sector and preference to focus more on exploration and production are the main reason behind this trend, as even in what could be considered as a bad years, IOC profi ts were dragged down by refi ning sector not exploration and production.

Risk associated to the refining sector and preference to focus more on the exploration and production are the main reason behind the shift.

JUNE 2010

5News

IFQC classifies fuel qualityTwo GCC members among the top 60 sulfur-free countries

The International Fuel Quality Center (IFQC) has ranked the top 100 countries based on sul-fur content standards in gaso-line. All EU countries placed within the top 50, now that 100% market penetration of “sulfur-free” (less than 10 ppm) fuels is required in the EU as of January 2009, furthering the region’s role as a leader in clean fuels. This bumped quite a few countries down, such as the US, which is now ranked 44th. If Cal-ifornia were a nation, it would rank 37th, the report noted.

Germany remains in fi rst po-sition with the earliest nation-wide implementation of the low-est sulfur level of 10 ppm since 2003; following in second posi-tion is Japan.

“It is encouraging to see movement year-over-year in these gasoline sulfur rankings.

Kuwait may still decide on building refinery by year end

Qatar’s Petrochemical industry all set for expansion

Kuwait may decide by the end of this year on plans to build a new refi nery as the Arabian Gulf state seeks to boost fuel output to meet demand in Asia, an of-fi cial with the state owned crude processing company said.

The country’s Supreme Pe-troleum Council is reviewing the plan for the refi nery, which could start by 2015, Bakhit Al Rashidi, deputy managing di-rector of planning at Kuwait Na-tional Petroleum told Refi ning and Petrochemical Middle East.

A plan for what would be Ku-wait’s fourth oil refi nery, to be located at Al Zour, was put on hold in March last year after the

It shows that countries are con-tinuing to improve their fuel quality specifi cations and mak-ing efforts toward zero sulfur fuels and reduced vehicle emis-sions,” said Liisa Kiuru, execu-tive director, IFQC.

Sulfur is found naturally in crude oil.

Oil-rich nations Qatar and the United Arab Emirates (UAE) again rank in the top 60 for low sulfur limits in gasoline (Qatar 54th and UAE 46th). Some coun-tries made remarkable improve-ments, such as Malaysia (85th) and Paraguay (57th), each up by 41 spots.

All EU countries placed within the top 50, while the UAE comes in ranked 46th, Qatar 54th.

Bahrain to increase refining capacityBahrain is considering increas-ing its refi ning capacity over the next fi ve years, by building the fi rst private refi nery in the coun-try, according to Abdulhussain Mirza, Bahrain Oil and Gas Af-fairs Minister.

“Steps have already been taken to make this possible,” Mirza said after opening the Petrotech exhibi-tion. “Bahrain will have a lot of oil supplies in the next few years and this will entail not only the capac-ity of Bapco being augmented but also setting up another refi nery,” he added. “An expansion at Bapco is on the cards but we may also look at new refi nery in the private sector,” he revealed.

Bahrain’s current refi ning ca-pacity stands at 267 000bpd.

A new pipeline from Saudi Ara-bia will increase oil supply from current 240 000 to 350 000bpd. Also, the development of Bah-rain fi eld will increase output to 100 000bpd Mirza said.

Qatar is all set to expand its down-stream petrochemical industry utilising the best raw material, the Deputy Premier and Minister of Energy and Industry, Abdullah bin Hamad Al Attiyah told reporters.

“In this business you always try to be innovative and bring new ideas. Mix feed of propane is one of these new ideas. All these as-sumptions are in our agenda,” he said at a news conference after the formal inauguration of the Ras Laffan Olefi ns Company (RLOC) ethane cracking plant.

He said that by 2014 Qatar’s to-tal production of petrochemicals is expected to reach some 28 million tonnes per annum. Downstream business needs new ideas.

government canceled contracts over political opposition.

The main design and engi-neering work for the project is done and construction tenders for the refi nery could be issued next year once parliament ap-proves the project, Al Rashidi said at the Middle East Petro-tech conference in Bahrain.

The refi ning unit of state run Kuwait Petroleum Corp. is also upgrading existing refi neries to produce cleaner fuels, like low sulfur diesel, Al Rashidi said.

Engineering and design work for that project is fi nished and the upgrades may be done in 2015 or 2016, he said.

Besides, Qatar is poised to be-come one of the world’s main pro-ducers of liquefi ed petroleum gas (LPG) when production touches the 14 million tonnes a year mark by 2010/2011, he said. Petrochem-ical units can use LPG as feedstock as well. “We are going to use all our best feedstock for our downstream industry,” said Al Attiyah.

News 6


Mehdi Adib is new CEO of TacaamolAbu Dhabi National Chemi-cals Company (ChemaWEyaat) has appointed Mehdi Adib as chief executive of its Abu Dhabi Chemicals Integration Company (Tacaamol) subsidiary.

Tacaamol will be the fi rst wholly-owned subsidiary of ChemaWEyaat, and is tasked in the construction and operation of the fi rst complex to be built in Khalifa port and industrial zone, in Al Taweelah area.

ChemaWEyaat is a devel-opment vehicle for the pet-rochemicals industry in Abu Dhabi, which is owned by state-owned International Petroleum

Investment Company (Ipic), Abu Dhabi National Oil Com-pany (Adnoc), and Abu Dhabi Investment Council.

“I have been involved in help-ing build some of the major re-fi ning and petrochemicals com-plexes in the world, but I fi nd my new assignment with Che-maWEyaat in helping to build the Tacaamol project into one of the world’s largest grassroots integrated chemicals complexes as the most exciting and chal-lenging one ever,” said Adib. “I am honored and look forward in being part of the team that will bring this dream into reality.”

Equate Petrochemical Company and The Kuwait Olefi ns Company (TKOC) announced that their combined profi ts for the fi rst quarter of 2010 reached $222 million. Commenting on this matter, Equate CFO Abdulkarim Mubarak said such results were realised due to the petrochemical market’s noticeable positive performance and the company’s distinguished performance.

Petrochemical and fertiliser capacity utilisation will show a strong improvement in the GCC this year, according to a Kuwait-based fi nancial research fi rm. While the capacity utilisation of petrochemical plants in the region will range between 65 and 68 % that of fertiliser units will range between 95 and 100% Global Investment House said.

Shell announced the successful completion of the Shell Eastern Petrochemicals Complex (SEPC) project in Singapore. SEPC is Shell’s largest petrochemicals investment to date and the second world-scale petrochemicals project the company has completed in Asia in 4 years.

The European Commission has imposed a provisional anti-dumping duty (ADD) on polyethylene terephthalate (PET) imports from the UAE, Iran and Pakistan. The investigation was launched following a complaint by the PET Committee of Plastics Europe.

BriefsAramco lifts refining outputSaudi Aramco aims to proceed with plans to boost its 3.7 million barrel a day refi ning capacity by 1.5 million barrels a day even as it struggles to fi nd joint venture partners to help build the plants.In a speech posted on the compa-ny website, Khalid al Falih, chief executive offi cer, said: “The devel-opment of three new, grassroots refi neries at Jubail, Yanbu and Jazan and the large expansion at Port Arthur in the US will raise this refi ning capacity by about 1.5 million barrels per day.”

The kingdom failed earlier this year to identify suitable bids for the planned Jazan refi nery, and commissioned state owned Aramco to build and fi nance the facility alone.

Aramco is boosting refi ning capacity to meet domestic de-mand and benefi t from exporting high value oil products.

The refi neries at Yanbu, Ja-zan and Jubail will each have a capacity of 400 000 barrels

Development of three new grassroots refineries will add 1.5m bpd

a day. Jubail, on the Arab Gulf coast, is being built by Aramco and Total SA at a cost of more than $12 billion, Salem Shaheen, CEO of Saudi Aramco Total Re-fi ning and Petrochemical Co, said last month. Saudi Arabia’s energy demand will rise to 8.3

million barrels a day of oil equiv-alent in 2028 from 3.4 million barrels in 2009 unless the king-dom becomes more effi cient, al Falih said.

“The increase in demand may be cut by 50% through improved energy effi ciency,” he said.

The development of three new refineries in the Kingdom and outside will boost production.

Mehdi Adib, the new CEO of Tacaamol.

7News


BUILD&PROJECTS8


China to build refinery in Egypt

Air Liquide announced that it has been awarded a contract by Ras-Gas Company Limited on behalf of Ras Laffan Liquefi ed Natural Gas Company Limited (3) and Qatar-gas Liquefi ed Gas Company (2, 3 and 4), for a large turn-key helium extraction, purifi cation and lique-faction unit to be installed in Ras Laffan, Qatar. The new unit will be the largest in the world, with a pro-duction capacity of 38 million m3 of helium per year. The technology used to purify and liquefy helium at very low temperature (-269°C) is a proprietary Air Liquide advanced technology. For this project, Air Liquide will provide the largest he-lium liquefi er in the world, which will be operated by RasGas.

This project arises out of the existing partnership between Air

Liquide, RasGas and Qatargas, which was formed for the success-ful development of a previous he-lium unit on the same site in 2003. The combined production of these two units will be 58 million m3 per year, making Qatar a leading

Dammam 7 joins hands with Shanghai HuayiThe Eastern Province-based Dammam 7 Petrochemical has signed an agreement with Shanghai Huayi for acrylic acid factory in Jubail.

The factory will be part of a huge petrochemical complex. Acrylic acid and its deriva-tives are a key factor in the Saudi downstream industry.

Dammam 7 has already signed an agreement with SATORP for the supply of 200 000 tons of raw material worth US$800 million.

The complex will also in-clude production of syngas, butanol and acrylic esters.

Saudi Binladin Group will invest US$139 million to more than quadruple production at a Sen-egalese oil refi nery, the head of the group’s oil and petrochemi-cal unit said.

The company’s Petroleum Chemical and Mining Co. unit will expand refi ning capacity at Societe Africaine de Raffi nage to 130 000 barrels a day from 27 000 barrels, Qasim al-Shaikh, chief executive offi cer of the divi-sion, told Bloomberg.

“We will secure the demand of Senegal’s market fi rst and then we will export the rest of the re-fi ned products to neighboring countries,” he said.

Air Liquide wins a contract in QatarThe new helium plant will make Qatar a leading producer of helium in worldwide

producer of helium, with 25% of worldwide production.

Moreover, under a long-term agreement with Rasgas and Qatar-gas, Air Liquide will be entitled to purchase 50% of the helium vol-umes produced by this new unit.

Cairo and Beijing have inked an agreement under which two Chi-nese companies will construct a US$2bn refi nery in Egypt, ac-cording to Egypt’s Oil Ministry.

The refi nery would have an initial capacity of 15 million t/y, to be expanded by another 15 million tonnes in the second phase of the project, the Associ-ated Press reported.

According to the report, no date has been set for the begin-ning of the project.

Chinese fi rms, Rongsheng Holding Group and National Chemical Engineering Co. Ltd., would retain ownership of the plant for 25 years.

The new plant will produce re-fi ned products for local market.

The new unit will be the largest in the world, with a production capacity of 38m m3 /year.

Access to this major helium source, combined with the acquisition of the international supplier and dis-tributor Pure Helium in 2008, will position the Group as one of the main players in the worldwide he-lium market.

François Darchis, Senior Vice-President, Air Liquide Group, and a member of the executive com-mittee, commented: “Air Liquide is particularly proud of this world-wide fi rst, which demonstrates our capacity to meet major complex needs thanks to our industrial and technical expertise. Qatar is a strategic supply source of helium for the years to come and Air Liq-uide will signifi cantly strengthen its worldwide helium supply posi-tion as well as its leadership in the Middle East.”

Senegal’s government early May completed the sale of a 34% stake in the refi nery to the Saudi company, known as PCMC, for $13.6m, according to al-Shaikh.

PCMC will pay for 30 % of the $429million expansion project in an agreement that will boost its stake to 51%, al-Shaikh said. Stakeholder Total SA of France would hold 20% and the rest would be owned by Senegal’s government, he said.

The investments will fund des-ulfurization and hydrocracking units that will boost the refi n-ery’s capacity to around 4 million tonnes per year from 1 million tonnes per year.

Saudi Binladin to expand refinery in Senegal

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Ras Laffan Olefin Cracker operationalTotal has announced the inaugu-ration of the world’s largest olefi n cracker based on ethane in Ras Laffan, Qatar. With a production capacity of 1.3 million tonnes of ethylene per year, the Ras Laffan Olefi n Cracker (RLOC) will feed the new Qatofi n polyethylene plant inaugurated in Mesaieed last November. Total Petrochemicals, through its participations in Qap-co and Qatofi n, joint ventures with Qatar Petroleum, holds 22.2% of RLOC. The other partners are Qa-tar Petroleum and Chevron Phil-lips Chemical Company.

The ethane feedstock used in the Ras Laffan cracker comes from the North Field, a giant offshore gas fi eld in which Total holds interests through the Dol-phin and Qatargas I and II proj-

ects. The natural gas (methane) is treated for export in the lique-faction plants also based in Ras Laffan and the associated ethane

Qatar Fuel Additives (Qafac) has shut down its 835 000 t/y meth-anol plant for maintenance.

The maintenance period is expected to take 45 days, which started in mid April till early June, according to a source close to the company.

The methanol plant is natural gas-based plant and it is loacted at Mesaieed Industrial city.

Established in 1991, QAFAC is a joint venture between In-dustries Qatar, OPIC Middle East Corporation, International Octane Limited and LCY Invest-ments Corp. The Company com-menced operations in 1999.

The QAFAC plant is designed to produce 832 500 t/y of Meth-anol and 610 000 t/y of MTBE.

SSTPC starts commercial productionSaudi Basic Industries Corpora-tion (SABIC) and China Petro-leum and Chemical Corpora-tion (SINOPEC) announced the start-up of the commercial pro-duction at the newly constructed petrochemical complex at Tian-jin, China.

The two companies formed SINOPEC SABIC Tianjin Pet-rochemical Company (SSTPC) in November 2009, as a 50/50 joint venture to build and oper-ate the new 3.2 million tonnes per year petrochemical complex. Pre-production operations at the plant began in January 2010.

The construction activities at SSTPC was completed in late 2009, while the pre-production operations began in Jan 2010.

SINOPEC SABIC Tianjin Petrochemical Company (SSTPC) will operate the 3.2m t/y project

The 50/50 joint venture project will increase the total capacity of SABIC by 1.6m t/y.

ROLC will supply feedstock to Qapco plant.

Qafac shuts down plant

OPERATIONS&MAINTENANCE

A special celebration of the new production coming onstream at the complex was held in the presence of HH Prince Saud bin Abdullah bin Thenayan Al Saud, chairman of the Royal Commission for Jubail and Yanbu and chairman of SABIC. The event was also attended by se-nior Chinese government offi cials and SINOPEC executives.

Prince Saud praised the ever-growing economic relations be-tween Saudi Arabia and China, and said that both countries were experiencing high growth rates and had proven their ability to withstand the global fi nancial crisis. He also noted that these achievements were possible be-cause of the rational policies adopted by the Saudi Arabian-

government, and the long-term economic reforms pursued by the Chinese government.

The new JV will add 1.6mn tonnes per year (50% of 3.2mn tonnes) to SABIC’s total output.

produced at Dolphin will be valo-rized by the Ras Laffan cracker as raw material for the petrochemi-cal industry.

Total Petrochemicals has a long record of successful partner-ships with Qatar since the foun-dation of Qapco in 1974. “With the start-up last November of the Qatofi n polyethylene plant and now with the Ras Laffan cracker, Total is further strengthening its partnership with the Qatari en-ergy and petrochemical sector. These major projects are consid-erably enhancing our position in petrochemicals, in particular in the growing markets in Asia and the Middle East”, stated François Cornélis, vice chairman of the executive committee of Total and president of chemicals.

10


10

METEOR tech for SSTPCThe Sinopec-SABIC (Tianjin) Pet-rochemical Company (SSTPC), is being driven by the METEOR (Most Effective Technology for Ethylene Oxide Reaction) Process from The Dow Chemical Company. The plant will produce ethylene ox-ide (EO) / ethylene glycol (EG) at Sinopec Tianjin branch complex.

The Tianjin facility has the larg-est single EO reactor in China. Pro-duction at the site began in early 2010. SSTPC is the fi rst DOW ME-TEOR Process facility in China.

“The large scale of the Tianjin project made it a demanding and complex undertaking,” said Joe Bromley, global business direc-tor for Dow EO/EG Licensing and Catalyst. “The project’s success is the result of seamless coopera-tion between Dow and Sinopec. Both teams worked relentlessly to ensure safe and on-time start-up,

even as they faced the extreme weather conditions of the coldest winter on record in China in 60 years. Now, Tianjin can be a source of pride for Dow and Sinopec as one of the most technologically ad-vanced EO/EG facilities in China.”

METEOR EO/EG Process, with its simple, single-reactor design and its unique EO catalyst, offers Tianjin the most effi cient route to EO/EG production. Commercial-ized in 1994, the technology allows manufacturers to produce EO/EG with fewer steps, less equipment and smaller plot size requirements than competitive technologies. The streamlined process has low capital cost and the METEOR technology, combined with the industry-lead-ing catalyst performance, enables the most effi cient utilization of raw materials and a substantial reduc-tion in plant emissions.

Borouge launches innovation centreBorouge has broken ground for its new Innovation Centre in Abu Dhabi, with a total investment in excess of US$70 million in equip-ment and facilities, Borouge’s In-novation Centre in Abu Dhabi will work together with the European innovation centres of Borealis as well as with local and international educational institutions such as the Petroleum Institute of Abu Dhabi, to further develop the competence of polymer science in the UAE. It is expected to be completed at the end of 2011.

More than 50 international re-searchers and engineers will focus on innovations for compounding as well as innovative plastics solu-

The new $70m centre will work together with the European innovation centres of Borealis

SCIENCE&TECHNOLOGY

LyondellBasell combines PB-1 and pipe units

PolyOne launches new solution PolyOne Corporation has intro-duced an eco-friendly liquid colo-rant system that helps manufactur-ers of consumer goods, packaging, appliances and transportation products reduce their costs and improve performance with a new sustainable solution, the company said in statement.

PolyOne is supplier of OnColor Complete Liquid Color Solutions, a two part system that combines patent pending technology from Riverdale Color Company and Clearfi eld Color, LLC with state-of-the-art liquid colorants and re-fi llable containers from PolyOne. OnColor Complete Liquid Color Solutions offers a unique return-able polymer delivery system that helps customers reduce operating costs, improve workplace safety and minimize inventory and capi-tal investments.

tions for the pipe, automotive and advanced packaging industries in close cooperation and partnership with Borouge’s customers through-out the value chain.

“For Borouge, value creation through innovation is an essential success factor,” said Rashed Saud Al Shamsi, Chairman of Borouge’s Marketing Company. “Putting cus-

CEO’s of Borouge, ADNOC and Borealis were present for the ground breaking ceremony.

tomers’ needs at the centre of our planning is refl ected in this invest-ment. Through ongoing research and development, we can react to the market needs much quicker and we can work more closely with our value chain partners identify-ing together product development opportunities.”

Currently, Borouge’s innova-tion capability is based at its pet-rochemical complex in Ruwais, thereby supporting the imminent start-up of the new manufacturing facilities. The Company also has recently announced an Application Centre at its manufacturing plant in Shanghai focussing on innova-tive solutions.

LyondellBasell has combined its Polybutene-1 (PB-1) and Pipe, Industrial Sheet & Pipe Coating business units to form the new Pipe & Infra-structure business unit.

“With the integration of the PB-1 pipe products into our pipe and infrastructure busi-ness portfolio, we have fur-ther strengthened our global offering to the market,” said Gianluca Brescia, head of LyondellBasell’s pipe & in-frastructure business. “Ly-ondellBasell can now offer a full range of products through one business unit, providing even more convenience and focussed service to our cus-tomers.”


11

RBG introduces inspection systemRBG has introduced a Real Time Digital Imaging System inspec-tion technique which benefi ts op-erators with reduced project times and increased cost savings, the company said in statement.

“Introducing the new inspec-tion technology is a direct result of client demand. Our fi rst project has been a great success and there has been signifi cant interest from a number of major operators,” said Steven Henderson, opera-tions manager for RBG USA.

“The digital imaging system brings signifi cant fi nancial and logistical benefi ts and we see it being a key part of our service offering across the region,” said Henderson.

The new product will reduce project times and increase cost savings for operators.

The real time digital imaging system projects digital video images onto a hand held LCD.

The advanced radiation tech-nology, which compliments the company’s extensive range of Non Destructive Examination services, is a nonintrusive method of check-ing insulated pipe work and asso-ciated equipment for corrosion and water ingress. “Traditionally, operators would have to identify and sample areas within the pip-ing circuit where insulation had to be removed and inspections carried out, which can be time-consuming, costly and ineffective as potential defects are not always identifi ed,” the company said.

The real time digital imaging system projects digital video im-ages onto a hand held LCD and head mounted display in real time,

at 30 frames per second. “Unlike previous x-ray systems, the image is presented continuously allow-

ing rapid in-motion scanning of pipes through a range of material densities,” the company added.


EQUIPMENT&MACHINERY12

SALES&SHIPMENTS

OCTAL and PEIE Oman sign a gas supply contractOCTAL Petrochemicals signed a gas supply contract with the Public Establishment for Indus-trial Estates (PEIE) of Oman, the country’s force behind developing and managing prime industrial land. Nicholas Barakat, managing director of OCTAL, and Said bin Ali Al-Mashani, director general of Raysut Industrial Estate signed the contract at a ceremony held at the PEIE offi ce in Salalah. This contract was made in accordance to the agreement between the Min-istry of Oil and Gas and the PEIE.

Under this agreement, the PEIE

will supply OCTAL with an initial 74 400 cubic meters of gas per day to meet its industrial production requirements. OCTAL has dedi-cated pipelines to its facility for this purpose and can accommodate suffi cient capacity to its site which by 2013 is expected to manufac-ture over 2 million tonnes per year of PET and PTA.

OCTAL’s second plant is in full production operating at over 118% of nameplate capacity. A third one is under construction to increase production capacity to 927 000t/y in April 2012.

Qafco exports melamine to EuropeQatar Fertiliser Company (Qaf-co), a subsidiary of Industries Qatar, signed an agreement with Helm, Germany to export 18 000 tonne of Melamine to Europe

Speaking on the occasion, QAFCO managing director, Khal-ifa Al Sowaidi said: “The agree-ment to market melamine from our upcoming Qatar Melamine Company goes in line with Qaf-co’s marketing strategy to ex-pand and reach the European markets.” He further added that the agreement will be a milestone for future business relationships in the region.

The agreement was signed by Khalifa Al Sowaidi, and Harmut Glaser, executive board member from Helm.

It is worth mentioning that the Melamine Company is owned by Qafco (60%) and Qatar In-termediate Industries Holding

The first 18 000 tonne shipment will open doors for Qafco to reach European markets

Qafco plant in Messaid Industrial City in Qatar is one of the largest fertiliser producers in the world, mainly urea and ammonia.

Kuwait signs LNG purchase contractsKuwait signed four year liquefi ed natural gas supply contracts with Royal Dutch Shell and Vitol Group as the Arabian Gulf state seeks fuel to run power generators during the summer months, an offi cial said.

The companies will supply be-tween three and fi ve cargoes a month in total starting in April through October, Abdullatif Al Houti, KPC’s managing director for international marketing, said at a conference in Kuwait.

Kuwait began receiving LNG imports this month and will take delivery of 500 million cubic feet a day between April and the end of October to fi re its power stations.

Company which controls 40%. Built with a total cost of US$320 million and with a production capacity reaching 60 000 tonnes

Bapco exports first shipment of 10ppm diesel Bahrain Petroleum Company “ Bapco” has exported its fi rst shipment of high quality die-sel, which contains less than 10 ppm of sulphur, the company said in statement.

This historical event comes with the implementation of the agreement that was concluded during last year with Morgan Stanley for the sale of three ship-ments of fuel at each of 65 000 tonnes of diesel of high-quality and less sulphur, covering the months of May, June and July.

per annum, the plant is the larg-est melamine plant in the Middle East as well as one of the largest in the world.

The plant is expected to be an added value to the urea produced by Qafco and to boost the com-pany’s profi tability.


13

COVER STORY14


Markus Wildi, president of The Dow Chemical Company in the Middle East, says strategic JVs offer fantastic prospects & Kuwait remains a land of opportunity

NEW VISION IN THE REGION

1614

15COVER STORY


15

Despite the cancellation of the US$17bn K-Dow joint venture in December 2008 with PIC of Kuwait, The Dow Chemical

Company has continued to build on its strong regional presence, mainly in Kuwait and Saudi Arabia. Given the importance of the region in the company’s portfolio, Dow has appointed Markus Wildi as its new president for operations in the region, which he holds in addition to his position as vice president of corporate development for the company’s operations in Kuwait.

“I have recently been tasked with additional responsibilities for the group’s business in the region,” explains Wildi. “In my new role as president for Dow in the

“WE HAVE OVER 60 YEARS OF EXPERIENCE IN MANAGING SUCCESSFUL PARTNERSHIPS AND JOINT VENTURES. THE OLDEST IS DOW CORNING, WHICH DATES BACK TO THE 1940S”MARKUS WILDI, PRESIDENT OF DOW IN THE MIDDLE EAST

managing successful partnerships and joint ventures. Today we have 62 successful joint ventures around the world, which are integral to our global reach,” he reveals.

The company’s major regional investments are today in Kuwait and in the Kingdom of Saudi Arabia. “We have partnered with Petrochemical Industries Company K.S.C. (PIC) of Kuwait on six joint ventures and are in the JV formation process of world-scale manufacturing complex in Saudi Arabia’s Eastern Province,” he explains.

For nearly 15 years, Dow and PIC have shared one successful milestone after another, partnering on six industry-leading joint ventures. “Our JVs with PIC combine Dow’s strong existing asset base, technology position and global market reach and presence. Our strategy of working with local partners to set up state-of-the-art petrochemical complexes in Kuwait demonstrates our commitment to transforming the regional petrochemical landscape while supporting regional employment objectives and economic diversifi cation agendas.”

In Saudi Arabia, Dow has a signifi cant stake in the Saudi Acrylic Monomer Company (SAMCo), a JV with Tasnee and Sahara Olefi ns Company, which will produce 250 000 t/y of acrylic acid. Dow’s

Middle East, I oversee the company’s operations in the region including the successful development and implementation of the company’s strategy. The Middle East has always been an integral region for us so part of my mandate will be to develop new business opportunities across multiple industry sectors relevant to our business,” he explains.

His duel-role is considered one of the top jobs globally for the chemical super-giant, and Wildi reports directly to Andrew Liveris, chairman and CEO of The Dow Chemical Company.

The collapse of the proposed K-Dow project in 2009 has not altered the vision of Dow toward the Kuwaiti market, and Wildi describes his mission in Kuwait as a special, crucial challenge for the company. “My main responsibilities are to build upon our local presence, enhance brand image and position, identify and evaluate new business potential in Kuwait while providing oversight of the company’s existing joint ventures in the country,” says Wildi.

Dow has a longstanding relationship with the Middle East beginning with the establishment of manufacturing and commercial facilities in the UAE and Egypt more than 30 years ago. “Worldwide, we have over 60 years of experience in

The company Dow’s share Partner (Kuwaiti companies) Status

EQUATE 42.5% PIC, Boubyan and Qurain Operational

Kuwait Styrene Company (TKSC) 42.5% Kuwait Aromatics Company (KARO) Operational

MEGlobal (Based in Dubai) 50% PIC Operational

Equipolymers 50% PIC Operational

Kuwait Olefi ns Company (TKOC) 42.5% PIC, Boubyan and Qurain Operational

EQUATE Marketing Company 50.1% PIC Operational

The company Dow’s share Partner (Saudi companies) Status

RTIP 50% Saudi Aramco Study

Saudi Acrylic Monomer Company 25% Tasnee and Sahara Olefi ns Company Construction

Polyurethane Alliance 50% Juffali & Brother Construction

COVER STORY16


The collaboration between EQUATE and The Dow Chemical Company goes back to 2001 when Dow acquired Union Carbide Corporation (UCC), one of EQUATE’s founders.

share was originally held by Rohm and Haas, which Dow acquired in April 2009.

Also in Saudi Arabia, Dow recently signed a business alliance with regional industrial conglomerate E.A. Juffali & Brothers to construct a polyol blends plant in Jeddah. This manufacturing expansion combines the company’s polyurethane systems and epoxy systems capabilities.

Winning Strategy A global credit crunch coupled with ever increasing volatility in energy prices made life diffi cult for chemical producers around the world. In the midst of the world’s greatest fi nancial crisis, Dow maintained its commitment to its transformation strategy. “We have been preferentially investing in performance and specialty businesses. These businesses depend on customer intimacy and technology-differentiated solutions,” reveals Wildi. “They are less cyclical, more value-add businesses, with

“WE HAVE BEEN PREFERENTIALLY INVESTING IN PERFORMANCE AND SPECIALTY BUSINESSES. THEY DEPEND ON CUSTOMER INTIMACY AND TECHNOLOGY-DIFFERENTIATED SOLUTIONS”MARKUS WILDI, PRESIDENT OF DOW IN THE MIDDLE EAST

higher profi t margins that are also more consistent earners over the cycle. Our acquisition of Rohm and Haas was a milestone in our execution of that strategy,” he adds.

Dow continues to strengthen the competitiveness of its franchise basic petrochemicals portfolio. “These assets produce commodity products that are sold into a competitive landscape, where scale and cost are critical to success,” explains Wildi. “Dow has taken a strategic approach that we call “asset-light”. This strategy entails sharing capital costs and project

risks with strong partners. In other words, pairing ourselves with resource owners who can position our franchise basics businesses for growth and competitive advantage, by providing access to feedstocks and new geographic channels to market while we provide technology and thought leadership in return, such as our partnerships in Kuwait and Saudi Arabia.”

Committing to this business strategy in the Middle East allows Dow to continue to invest in its successful partnerships and also to identify new opportunities to create world-class joint ventures across the region.

17COVER STORY


17

Dow has long presence in the region dating back 30 years.

Markus Wildi, president of Dow operations in the region.

The seawater cooling tower at the Dow-PIC Olefi ns II Project site in Shuaiba which was constructed by Fluor Corporation.

In executing this business strategy, Dow is encountering some regional challenges. “One of the pressing challenge areas in the region is identifying local talent that has the right mix of education and experience to grow and excel in the petrochemical industry,” he reveals.

To overcome challenges in the area of talent procurement, Dow entered into a strategic partnership with King Abdullah University of Science and Technology (KAUST) to establish a multi-year, multi-million dollar joint research and development (R&D) framework.

“Our plan with KAUST is to expand Dow’s innovation footprint into the Middle East, and our collaborations with universities in the Middle East and Africa R&D centre is to enrich the R&D experience and develop the region’s R&D expertise,” he says. “With a 110-year history, our R&D capabilities are developing the innovative

“THE MIDDLE EAST DOWNSTREAM MARKET IS VERY EXCITING BUT IN THE END IT COMES DOWN TO PEOPLE”MARKUS WILDI, PRESIDENT OF DOW IN THE MIDDLE EAST

products and technologies required to provide solutions to the world’s most pressing problems. In the Middle East, R&D works closely with Dow customers to develop innovative solutions the market needs.”

While access to feedstock is a key motive behind Dow’s investments in the region, growth opportunities are another factor. “The Middle East downstream market is very exciting but in the end it comes down to people. What we’re seeing here in the Middle East is a young population – among the youngest in the world – that is also among the world’s fastest-growing. Ultimately, these populations all expect more from life,” says Wildi. “We have an opportunity to participate in the socio-demographic growth in a number of dynamic ways, and through a number of industries,” he explains. Wildi also sees that the Middle East downstream market

presents an opportunity to partner with a range of prominent companies and initiatives in order to act on what we’ve been learning about the region for quite some time.

“It is a place that deserves a concentrated and long-term investment – in hard assets and goods and services – but above all, in its people,” he adds. Wildi is not deterred by the large-scale expansions which have been rolled out in the Middle East by many national oil company subsidiaries, and says the region holds enormous promise for new developments. “There is plenty of room for investment in the Middle East. With the feedstock availability it absolutely remains an attractive place to expand,” he concludes.

18


Event Review

www.arabianoilandgas.com

The Petrotech 2010 conference and exhibition, held last month in Bahrain, attracted participants and exhibitors from all over the the

world. The event, the seventh Petrotech conference held to date, was an opportunity for service providers to try and impress their major clients with their newest products and solutions.

Set against a backdrop of ongoing refinery expansion projects in the region, Petrotech 2o1o attracted highly respected individuals and companies from around the world, united in a quest to increase capacity as global demand for energy continues to rise.

Nearly 100 technical presentations were held at the event, exploring issues relating to the technology, management, equipment, health and safety, manufacturing and economy of refinery and petrochemicals. The associated exhibition on refining and petrochemicals products and services saw a total of 121 exhibitors from 25 countries participating.

Speaking at the event, Bahrain’s Oil and Gas Minister, Abdulhussain Mirza, said that the theme of Petrotech 2010, “Downstream challenges: financing, market changes and technology”, was appropriate given the enormous challenges the industry faces. “There is some concern amongst industry observers that the rate at which additional refining capacity is coming onstream worldwide is outpacing the rate at which demand for refined products is expected to grow,” Mirza said.

“The overcapacity might lead to tighter refinery margins beyond 2012 to give us a competitive advantage and better position to capture the opportunities that future market environment may offer,” he said.

Speaking about Bahrain, Dr Mirza said that his country may not be the largest player in the region’s oil and gas industry,

Abdulhussain Mirz, Bahrain Oil and Gas Minister with Khalid Al Falih, CEO of Aramco, visiting the Dow Chemical stand.

but over the years had established itself as a professional, customer-focused centre striving for excellence. “We need to seek out and grab hold of opportunities and be open to new ideas,” he said.

Petrotech was an opportunity for many international companies to establish a presence in the region. “This is our fi rst presence in the region, as our major operation in the US and the Far East, Petrotech is a platform for us to meet new clients,” said Juan-Carlos Mani, vice president of Process System Enterprise. “As we don’t have a regional offi ce in the region, which is a challenge for our operation in the Middle East, our presence at Petrotech will help us to overcome this issue,” he explained.

“At Petrotech, we are showcasing our new technology which is build on what’s called Open Equation,” said Mani. “It allows higher energy efficiency for clients.”

Major international service providers were present at the exhibition along with their local distributers. “We participate in the event with our local distributer Abdulkarim Group, as this will help us to learn more about the region,” said Pier Luigi Moretta, general manager of the Italian company Valvosider, manufacturer of industrial valves.

“Clearly, the Middle East is one of the few regions in the world that still have sustainable growth. Participating at Petrotech helped us to network with new clients,” he said.

“THERE IS CONCERN AMONGST INDUSTRY OBSERVERS ABOUT THE RATE AT WHICH REFINING CAPACITY IS COMING ONSTREAM”ABDULHUSSAIN MIRZ, BAHRAIN OIL AND GAS MINISTER

Downstream experts and service providers gathered at Petrotech 2010 to discuss the challenges facing the industry and to showcase their latest products and solutions

PETROTECH 2010

Technology Focus20


Refi ning and Petrochemicals Middle East travels to Germany to see how LyondellBasell’s innovative technologies are helping producers in the Middle East

ADDING VALUEL

acking the in-house cutting edge technology needed to stay ahead of the pack, Middle East petrochemical producers need to join forces with

technology owners. For fi rms able to provide that technical know-how the door is open to become a partner of choice with the gas rich petrochemical producers in the Middle East. LyondellBasell is one of these companies.

LyondellBasell has had a presence in the region for ten years, which began in 2000 when it joined forces with National Industrialization Company (Tasnee) to build its fi rst polyolefi n project in Saudi Arabia. “It was an excellent decision we made in late 1999. The thinking then was that it is diffi cult to compete with the Middle East due to the feedstock advantage, so it is wise to form partnerships in the region,” says Anton de Vries, senior VP olefi ns and polyolefi n, Europe, Asia & International.

“IT’S DIFFICULT TO COMPETE WITH THE MIDDLE EAST DUE TO THE FEEDSTOCK ADVANTAGE, SO IT IS WISE TO FORM PARTNERSHIPS IN THE REGION” ANTON DE VRIES, LYONDELLBASELL

20

LyondellBasell now participates in three olefins and polyolefins joint venture companies in Saudi Arabia with Tasnee and Sahara Petrochemical Company, the three JV’s are Saudi Polyolefins Company (SPC), Saudi Ethylene and Polyethylene Company (SEPC) and Al-Waha Petrochemical Company. All these JV’s are based on LyondellBasell’s proprietary technology including the largest Spherizone for the production of PP, Lupotech T for LDPE and Hostalen ACP for HDPE technologie.

Following the start up of production from its facilities in the Middle East, the company has announced cessation of polypropylene production (PP) at Terni, Italy, due to the high production costs and the difficult market environment. The Terni plant had a nameplate capacity of 255 000 tonnes per year.

Anton de Vries is

senior VP at

Lyondellbasell.

21Technology Focus


LYONDELLBASELL JOINT VENTURES IN THE REGION

Al Waha Petrochemicals Company is a joint venture between “SAHARA Petrochemicals” and Lyondell Basell companies where they own 75% and 25% respectively, it produces 460 000 tonnes per yearof propylene which is the feedstock for the production of 450,000 tonnes per year of polypropylene that will be sold both in regional and international markets.

Saudi Polyolefi ns Company (SPC) is a joint venture between Tasnee which controls 75% and 25% for LyondellBasell. SPC produces 720 000 tonnes per year of Polypropylene after completing the expansion from initial 450 000 tonnes per year/y.

Saudi Ethylene and Polyethylene Company (SPEC), LyondellBasell controls 25% of the company while TASNEE and Sahara Olefi ns Company controls 75%. Its annual production capacity is one million tonnes of ethylene, 285 000 tonnes of propylene and 400 000 tonnes of high density polyethylene (HDPE), and 400 000 tonnes of low density polyethylene (LDPE).

Some products produced in Al-Waha or SEPC plants in Saudi Arabia are tested at Hoechst instead of in-site laboratories.

The company has three major polyolefi ns JV in Saudi Arabia. LyondellBasell invests heavily in research and development.

Moreover, the company counts on the throughput from its Middle Eastern facilities to solidify its position around the world.

“We need to use the extra capacities from SEPC and other Middle East plants to strengthen our position in reaching worldwide customers,” says Tassilo Bader, senior vice president, polyolefi n solutions.

Technology FocusA cornerstone of the company’s global business is developing process technology and catalysts, in addition to the production of polymers, chemicals and fuel. “The majority of our technologies are for open licensing, but our Catalloy and Polybutene technologies are only

for in-house utilisation,” de Vries says. “We invest heavily in research and development,” he adds.

The company operates an industry leading R&D centre, with advanced laboratories, in Hoechst industrial park in Frankfurt, Germany. In this centre, the company conducts testing and analysis under very strict pressure, temperature and humidity environments.

Some products produced in Al-Waha or SEPC plants in Saudi Arabia are tested at Hoechst instead of in-site laboratories. “Some of the tests are to be undertaken here in Hoechst, as the newly established laboratories in Saudi Arabia need to work with a reference laboratory before achieving the required

international reputation,” says Dr Hans-Friedrich Enderle, senior researcher at the research and development centre, polymer physics and characterization, in Hoechst

Wesseling siteThe company operates more than 50 manufacturing sites in 19 countries. One of the company’s largest sites in Europe is Wesseling, located on the Rhine River, which began operations in 1953. The complex has production capacity of more than 2.2 million tonnes of polyolefi ns per year. Two crackers, four high density polyethylene plants, two low density polyethylene plants, three polypropylene plants and one advanced


“WE NEED TO USE THE EXTRA CAPACITIES FROM SEPC AND OTHER MIDDLE EAST PLANTS TO STRENGTHEN OUR POSITION IN REACHING WORLDWIDE CUSTOMERS” TASSILO BADER, LYONDELLBASELL

polyolefi ns plant are in operation. The crackers run with mixed feedstock, which is sourced via pipeline or from the adjacent Shell refi nery. The products from the facilities are used in fi lms, cable and pipe coatings, fuel tanks, injection molding applications and housewares.

What sets it apart is that it has its own power plant of 470 MW, which allows the company to operate effi ciently, along with wastewater treatment and sewage incineration plants.

Consolidating positionsThe Middle East operations are set to be a very important for the company due to different reasons, such as the feedstock advantage, and it geographical location near the growing Asian markets.The company intends to use these new capacities to serve better its clients, whether in polyethylene or polypropylene business, and hence, consolidate its position in this business. Moreover, on the R&D side, the company tries to develop energy effi cient products as it

everybody want to reduce the production cost. “Our goal

is to develop effi cient technologies by

reducing the steam and electricity

consumption of the plants, as customers require energy-effi cient

products,” de Vries concludes.

Wesseling complex is located on the Rhine River and began operations in 1953, with a production capacity of 2.2m t/y.

Technology Focus22

Annual capacity of polypropylene at the LyondellBasell’s joint venture company Saudi Polyolefi ns Company (SPC), in t/y.

720 000

Tassilo Bader

senior vice president,

polyolefi n solutions.


Maintenance Time24

Mike Watson, Managing and Technical Director, Tube Tech International

25Maintenance Time


A review of polymer fouling challenges, the limitations of traditional polymer removal techniques and an assessment of new innovative polymer removal methods.By Mike Watson, managing and technical director, Tube Tech International

“POLYMER FOULING DAMAGES EQUIPMENT AND IMPACTS ON HEAT TRANSFER EFFICIENCY AND ALSO ADDS EXPENSE TO PLANT OPERATION DUE TO FREQUENT SHUTDOWNS” MIKE WATSON, TUBE TECH.


NEW POLYMER REMOVAL TECHNIQUES

Often deemed impossible to remove and most defi nitely impossible to ignore - polymer fouling is the cause of many a maintenance professionals

headache. Having used innovative technology to removal polymer from a variety of plant equipment Mike Watson, managing director of Tube Tech International, discusses common challenges found within all polymer removal contracts, the limitations of traditional polymer removal techniques and highlights case studies demonstrating new polymer techniques used within a cross section of industries including downstream.

Common Polymer Removal ChallengesPolymer fouling not only damages equipment and impacts on heat transfer effi ciency but also adds expense to plant operation due to frequent shutdowns.

The potentially hazardous nature of polymer fouling creates a number of challenges to those aiming to remove it. In the main non-man entry is a prerequisite for polymer removal from vessels due to the potentially hazardous nature of the fouling and fume.

The removal of polymer from heat transfer equipment can also include access issues. If tubes are plugged or gaps between the tubes on the shell side are blocked the challenge becomes creating an entry point to make direct contact with the fouling.

and can cause serious environmental damage.Some companies are still using hammers,

chisels and even chain saws to remove polymer blockages. These methods are dangerous, exceptionally time consuming and often needs to be used in conjunction with another method to achieve a reasonable level of cleanliness.

Numerous drilling methods have also been tried to remove polymer from within tubes including turbine drills, pneumatic drilling methods and dry drilling. The drilling of polymer unfortunately carries with it the risk of damage to equipment.

Traditional high and even ultra high pressure water jetting can remove polymer blockages but can take a huge length of time. Traditional water jetting techniques often just ‘bounce’ off the deposit.

Numerous drilling methods are used to remove polymer from within tubes, in the photo blasting a fused polymer vessel.

Another challenge is ensuring no damage is made to the coils, blades, paddles etc within tanks and vessels. By default the cleaning techniques used to remove polymer have to be forceful yet the fragile internal mechanisms of the vessels have to be taken into consideration.

Traditional Polymer Removal TechniquesSolvents and chemicals have been used to try to remove polymer based fouling for a number of years with limited success. These techniques are expensive, create a huge amount of waste

Maintenance Time26


Severe polymer fouling before clean which generaly causes damage of equipment and adds expenses to plant operators.

Innovative Polymer Removal Methods

Severe raw polyethylene shell side fouling on reactor tubes was like having a 1m cube solid block of high density polymer surrounding the stainless steel tube external surfaces. The client urgently required passage between the tubes. The biggest challenge was not only removing the polymer deposit from the external tube surfaces but overcoming the problem of “access between the 5mm gap between the tubes” . Traditional high pressure water jetting and band saws could only create a gap the width of the saw blade and nothing more.

Tube Tech made design modifi cations to their PlateJetTT™ system, originally designed to clean the shell side of Texas Towers (VCFE/Platformers). The system removed a staggering 95% of the polymer fouling from the shell side compared to 20% removed by traditional cleaning contractors. The process was applied using semi remote equipment to minimize the fatigue element

making the cleaning process far safer and therefore quicker.

A 5m high x 2.5m diameter polymer mixing vessel became unserviceable following a process error that caused its contents to fuse into a solid mass of styrene. The plant’s operators tried chiseling the hard styrene out, but after several weeks had made little impression on it. Replacement of the vessel would be expensive, take too long and be problematic structurally. Cleaning could be complicated by the heating coils around the wall of the vessel, as any cleaning solution would have to be able to reach behind them to remove the styrene.

Until there was room in the vessel for an operative, the work started with a remote head, removing styrene from the manway. Once the manway was cleared, Tube Tech used a WysperJeTT™, running at up to 60kpsi but producing very low water volumes. This combination is extremely powerful but has little reactive force, so is not tiring for the operator. The lance does have to be held very close to the target, as the water’s energy dissipates rapidly. Much of the 2-3 litres-per-minute jetting water actually disperses as vapor, leaving relatively little to be pumped out of the vessel. Having an operator working safely in the vessel meant that it was possible to cut away the styrene behind the heating coils and around the central mixing shaft and paddles completely. The vessel went back into production quickly without the trauma and expense of replacement.

ConclusionOperators risk huge fi nancial losses while trying to remove polymer using inadequate traditional cleaning techniques. “I get so frustrated with those who hold a ‘this is the way we have always done it so let’s carry on doing it this way’ attitude. Traditional techniques, especially those that are ineffective and costly, need to be challenged constantly,” says Mike Watson. Tube Tech International believe that the polymer production sector stand to benefi t greatly from innovative specialist cleaning contractors who are willing and able to utilise bespoke polymer removal techniques. Large chunks of polymer removed from polymer vessel which causes damages equipment and impacts on heat transfer.

Working days required to undertake a scheduled maintenance of a Middle

Eastern petrochemical plant.

14

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

Official Show Daily Publisher

Saudi Arabia Profi le28


Companies in KSA have had a massive advantage thanks to the cheapest gas in the world, yet have so far failed to transform that subsidy into world beating production

Saudi Arabia downstream industry is booming thanks to its huge oil and gas reserves. It controls more than 260bn barrel of proved crude

operated by state controlled company Saudi Aramco, which is the biggest in the world, and the fourth biggest gas reserve of 249 trillion cubic feet, according to the BP annual statistic review.

HistoryThe industry in Saudi Arabia has evolved in three phases. “Phase 1 covers the pre-1983 years when the foundation for the industry was established, starting 1976 with the establishment of the Royal Commission for Jubail and Yanbu to build and maintain a world-class infrastructure in the twin industrial cities at a capital cost of $22 billion,” says Dr Abdulwahab Al-Sa’doun, general secretary of the GPCA, and the ex director-general of the energy

sector at SAGIA. “This period also witnessed the development of the master gas system (MGS) by Saudi Aramco at capital cost of $12 billion,” he adds. The MGS includes gathering systems, processing plants, fractionation plants, storage facilities, transmission pipelines, and an export terminal for NGLs.

In 1976, Sabic, a government-owned enterprise to manufacture basic and intermediate petrochemicals, fertilizers, and metals was established. In 1984, 30% of Sabic’s ownership was offered to Saudi and GCC investors.

The Phase 2, between 1983-99, included the start of production of methanol by a Sabic affiliate, Ar-Razi, in 1983. “Two key events occurred during this phase: The first was the commissioning in 1994 of the first flexible feed cracker by Arabian Petrochemical Co. (Petrokemya), a subsidiary of Sabic. This signaled the

beginning of mixed feedstock cracking,” says Dr Al-Sa’doun. “The second event occurred in 1995, when the petrochemical sector was opened to private investors. This led to the start-up, in 1999, of the Saudi Chevron Phillips Co. plant in Al-Jubail, the first wholly owned private petrochemical venture in Saudi Arabia.”

The third phase of Saudi Arabia’s petrochemical development was during the period 2000-2005, which witnessed a trend towards globalized production as Sabic acquired DSM Petrochemicals of the Netherland in 2002.

Driving investmentThe cost advantage of the Saudi Arabia downstream industry is the main factor behind the success of petrochemicals industry, as Saudi Aramco subsidized ethane feedstock for local companies at a cost of US$0.75 per million btu.

GLOBAL DOMINATION

Petro Rabigh is the fi rst and the largest integrated project in the downstream industry in the Kingdom and in the Middle East, it is also among the 15 largest refi neries in the world.

29Saudi Arabia profi le


“BETWEEN NOW AND 2014, WE WILL HAVE BROUGHT ON STREAM FACILITIES YIELDING ANOTHER 400 MILLION STANDARD CUBIC FEET PER DAY OF ETHANE”ALI AL-NAIMI, SAUDI OIL MINISTER


The industry has evolved in three phases starting with the establishment of the Royal Commission of Jubail and Yanbu.

But, due to the limited availability of free gas as huge number of projects announced in the period between 2004 and 2007, Aramco stopped the allocation of ethane feedstock. Saudi International Petrochemical Company (Sipchem) was the last company to receive subsidized ethane gas allocation in 2007. To overcome this situation, Saudi Oil Minister, Ali Al-Naimi, said that his country is taking more initiatives to provide additional supplies of feedstock to the industry. “We are bringing a number of gas facilities into operations, which will have ethane supplies,” he said. “Between now and 2014, we will have brought on stream facilities yielding another 400 million standard cubic feet per day of ethane.”

The abundance of the feedstock in the Kingdom was the motive for major international technology owners to invest in Saudi Arabia, as a successful petrochemical project requires marriage between cheap access to feedstock and having the right technological know-how.

Another factor behind the booming of the industry in the Kingdom is the easy way to secure fi nance to construct new projects, as Saudi Arabia government has created fi nancing authorities like Saudi Arabian General Investments Authority (SAGIA), Saudi Industrial Development Fund (SIDF), and Saudi Fund for Development (SFD). “Before the credit crunch, Saudi Arabian companies were able to source loans for their projects just by mentioning the name of the family,” says Sayed Rashid Husain, vice president of Al-Azzaz Establishment. “But now, the situation has changed due to the troubles related to Al-Qusaibi and Saad families issues with banks,” he adds.

A recent report from the Saudi Faransi Bank revealed that it is plausible for bank lending to private sector to expand by 8% in 2010 as long as a few large fi nancing deals reach fruition this year.

The state is doing the utmost to support the petrochemicals sector as it is the largest non-oil sector in KSA. Saudi Arabia is the world’s 11th largest petrochemicals supplier, accounting for 7-8% of total supply, according to SAGIA. While the nation’s current strengths lie in the production of basic petrochemical building blocks such as ethylene and methanol, there are plans to diversify its petrochemical portfolio into more complex, distinctive products such as specialty chemicals and engineering thermoplastics. At the same time, Saudi Arabia is investing in raising its global market share profile to 13-14% by 2010.

In this regard, and in order to move more into specialty chemicals product, SABIC acquired GE Plastic unit for US$11.6bn in 2007, this deal allowed the company to acquire many technologies used for the production of specialty chemicals like polycarbonate. Kayan Petrochemical, a subsidiary of SABIC, will be the fi rst company in the kingdom to produce specialty chemical.

Refining crunchWhile Saudi Arabia’s petrochemical sector is witnessing a bonanza period, the refining sector is still suffering and failing to meet increasing domestic demand. To meet this surging demand, Saudi Aramco plans to boost its 3.7 million barrel a day refining capacity by 1.5 million barrels a day, even as it struggles to find joint venture partners to help build plants. “The development of three new, grassroots refineries at Jubail, Yanbu and Jazan and the large expansion at Port Arthur in the US will raise this refining capacity by about 1.5 million barrels per day,” said Khalid al Falih, chief executive officer of Saudi Aramco, in a speech posted on the company website

Currently, Saudi Aramco operates six refi neries. The biggest refi nery is Ras Tanura , located on the Eastern cost of the kingdom, with a refi ning capacity of 525 000 bpd.

“Saudi Arabia’s energy demand will rise to 8.3 million barrels a day of oil equivalent in 2028 from 3.4 million barrels in 2009 unless the kingdom becomes more efficient,” al Falih said.

The increase in demand may be cut by 50% through improved energy efficiency, he said. “If no efficiency improvements are achieved and the business is as usual, the oil availability for exports is likely to decline to less than 7 million barrels per day by 2028, a fall of 3 million barrels per day, while the global demand for our oil



Integrating petrochemicals plants with refi ning complex is Saudi Arabia’s new strategy maximise the returns on its feedstock.

will continue to rise,” he added.Moreover, Saudi Arabia refineries face

a challenge of meeting the Euro5 specification, which dictate the reduction of sulfur content to 10ppm for refined products targeting the Europe.

Integrated SolutionsTo overcome the difficulties that refining sector faces, and to increase the profitability of the existing refineries, Saudi Arabia has started a program of integrating refineries with petrochemical complexes.

This idea dates back to 1990’s, but low oil prices adjourned plans to upgrade existing refineries. The huge windfall generated by high oil prices in 2003 helped Aramco reviving its dream to establish its integrated petrochemical complex. “Petro Rabigh is the first integrated project in the region, which includes a refinery and petrochemical plants,” says Zaid Al-Labban, president and CEO of Petro Rabigh.

The project started operation in November 2009, and produce 2.4m t/y of petrochemical products. The capacity of the refinery is 400 000 bpd and accounts 19% of Saudi Arabia refining capacity. “The construction of the project was

completed within 30 months,” says Al-Labban.

Beside Petro Rabigh, Aramco is upgrading two other refineries, Ras Laffan refinery in joint venture with Dow Chemical, and Yanbu refinery.

Aramco is currently looking for a partner for its Yanbu project. Top management of Saudi Aramco and Sinopec Corp of China met last month in Beijing and the topic of jointly financing and building the 400 000 bpd Yanbu refinery was part of the discussions. “We expect Aramco to choose a new partner for the Yanbu refinery else fund it on its own,” says Dr. John Sfakianakis, chief economist at Saudi Fransi Bank.

Sources said that Sinopec may join forces with Aramco to execute the Yanbu refinery. “A 400 000 bpd refinery costs around $4.4 billion in China, but would require $7.32bn investment in Saudi Arabia. We are concerned about the returns on investment,” Sinopec Corp chairman Su Shulin told reporters. “We are monitoring the project, but have not entered formal talks.”

ChallengesIntegrating refineries with petrochemical plant represents big challenge for

contractors as well as for project owners. “Integrating refineries with petrochemical plants is very complex and costly project,” says Andy Allen, global director of chemicals and petrochemicals division at Foster Wheeler. “Previously, $3bn or $4bn project was seen as mega project. But, with the integration trend, we are talking of $10bn and more,” he adds.

Another challenge is related to the supply chain issue, which is considered as a factors of success for the downstream industry. “The supply chain is still in its infancy,” says Dr. Abdulaziz Al-Bati, general manager of supply chain at Tasnee Petrochemical complex and also chairman of GPCA supply chain committee. “It may take a while for it to reach its maturity,” he adds.

Electricity cost increase is another challenge facing producers, as the Saudi government decided to increase prices destined for industrial usage. The effect of this increase on the cost hasn’t been assesed yet, but experts expect that it may have impact production costs.

Going GlobalThe huge amount of capital of companies like Saudi Aramco and Sabic have opened door for these companies to invest outside the Kingdom. Beside been supplier of over 20% of China’s crude imports, Aramco holds a 25% stake in the 240 000 bpd Fujian refi nery in the southeastern coastal province of Fujian, in joint venture with Sinopec Corp and ExxonMobil.

Last year SABIC joined forces with SINOPEC in China and established a 50/50 joint venture project to produce 3 million tonnes per year of petrochemical products, operated Tianjin Petrochemical Company (SSTPC). With the new capacities coming on stream in the near future, Saudi Arabia will no doubt swallow up a larger slice of global petrochemical production. Although currently ranked 11th, by signifi cantly increasing its output by 2011, it will be nudging ever closer to the world number one spot. The support to push through this transformation will no doubt come from the grass-roots of Saudi Arabian society, as 14 of its petrochemical companies listed and part-owned by KSA citizens on its stock exchange.

31Saudi Arabia profi le

Refining & Petrochemicals Middle East June 2010www.arabianoilandgas.comwww.arabianoilandgas.com

Refi ning & Petrochemicals Middle East takes an in depth look at the operations of the biggest petrochemical producer in the Middle East, and its forward vision

Since its inception in 1976, Saudi Basic Industries Corporation (SABIC) has became one of the most prominent petrochemical

producer in the world, mainly beacsue of the subsidized feedstock allocation it recieves from Saudi Aramco.

The company business is divided into four major units: chemicals, fertilizers, plastics and metals.

Sabic produced 37.4m tonne of chemicals in 2009, 8.66m tonne of polymers, 6.54m tonne of fertilizers and 4.77m tonne of metals. It also produced 1.03m tonne of innovative plastics.

The products of the chemicals unit are produced from feedstocks including methane, ethane, propane, butane, and

light naphtha. Chemicals account 60% of SABIC production. The chemical business unit produces four groups of products: olefins and gases, aromatics and chlor-alkali, oxygenates and glycols.

SABIC is the world largest producer of MTBE and MEG, it controls around 18% of the glycol market. An accident at one of SABIC’s MEG plant in late 2007 early

2008, caused a shortage of MEG supply in the international market, led MEG prices to soar to its highest levels at around US$1700 per tonne.

New production subsidiaries will boost the company’s chemicals output. Yanbu National Petrochemical Company (Yansab) began production at its complex in Yanbu in 2009, it comprises eight

SABIC 2020 VISION

SABIC is the world largest producer of MTBE and MEG as it controls around 18% of the glycol market, and it aims to be the largest petrochemicals producer in the world by 2020.

“SABIC’S JOINT VENTURE WITH SINOPEC, INDICATES THE COMPANY INTENTIONS TO DIVERT ITS MAIN FOCUS TO THE MAIN MARKETS IN ASIA AND FAR EAST”SAYED TAIMURE AKHTAR, GLOBAL INVESTMENT HOUSE



production plants, and added 4 million tonnes of petrochemical products.

Eastern Petrochemical Company’s (Sharq) cracker project which came on stream late 2009, increased the capacity of the MEG plant to 1.38 m t/y from 700 000t/y, the new expansion also double the polyethylene capacity to 1.55m t/y, along with increasing the ethane cracker capacity to 2.46m t/y.

SABIC has also started commercial production from its joint venture project in China, SINOPEC SABIC Taianjin Petrochemical Company (SSTPC), which was formed in November 2009. SSTPC is 50:50 JV between SABIC and SINOPEC, with the design capacity to produce 3.2mn tonnes of different grades of petrochemical products including basic chemicals, intermediaries and polymers.

The construction activities at SSTPC were completed in late 2009, while the pre-production operations at the complex began in Jan 2010. “We believe the

SABIC’s joint venture with SINOPEC, indicates the company intentions to divert its main focus to the main markets in Asia and Far East mainly China and India,” says Sayed Taimure Akhtar, senior financial analyst at Global Investment House. “This will help the company to overcome the steady demand growth in European and US markets, which are still uncertain. Moreover, we believe the JV with SINOPEC indicates the company strategy to make marketing alliance with dominated players to make easy entry in Chinese market and share benefit of high demand,” he explains.

Since Asian markets are highly occupied by local players like SINOPEC and Reliance, SABIC’s JV with SINOPEC will give an opportunity to use the SINOPEC distribution channels to receive the benefit if rising demand in the Asian markets. “This will allow the company to overcome the situation of steady demand in US and European countries,” he adds.

2020 VisionSABIC aims to triple its capacity to 130m t/y by 2020, this target will be reached through organic growth and acquisition. The company aims to move more into specialty chemicals, said Mohamed Al-Madi, CEO of SABIC, during the fourth GPCA annual forum, held in Dubai in Dcember 2009. By 2020, SABIC production of performance chemicals, which includes base products, functional chemicals and functional polymers, is forecasted to to account for close to 10% of SABIC revenues.

The innovative plastics unit is also a corner stone of the company’s 2020 vision, as the innovative plastics’ materials continued to expand business opportunities for the company into different industries from automotive industry, to the health care industry to many other industries.

Research and development is another area SABIC wants to grow in. The company has recently announced the development of new advanced polypropylene catalyst. This step will help the company to achieve its goal of leading the global petrochemicals market.

The start up production from SABIC’s subsidiareis in the Kingdom and outside will increase the company total output.

Saudi Kayan will be producing speciality chemicals.

“THE JV WITH SINOPEC INDICATES THE COMPANY STRATEGY TO MAKE MARKETING ALLIANCE WITH DOMINATED PLAYERS TO MAKE EASY ENTRY IN CHINESE MARKET”SAYED TAIMURE AKHTAR, GLOBAL INVESTMENT HOUSE

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Storage Tanks34

Tank farms are critical infrastructure at any downstream complex. RPME investigates more about the guidelines to follow when building your next storage tank facility

STORING SAFELY

Storage tank facility at Chemanol plant in

Saudi Arabia.

35Storage Tanks


“PRODUCT LEAKAGE CAN LEAD TO CONTAMINATION OF SOIL AND WATER COURSES LEADING POTENTIALLY TO PUNITIVE ACTION FROM THE ENVIRONMENTAL AGENCY AND NEGATIVE CORPORATE PUBLICITY”SHERMAN NUNIS, OPERATIONS MANAGER AT SGS INDUSTRIAL SERVICES


Before constructing any storage tank facility companies have to undertake rigorous environmental and safety measurements. “Storage of large quantities of hazardous substances entails risk for population, environment and surrounding area. Spills of hazardous substances into the soil can lead to expensive decontamination processes,” says Sherman Nunis, operations manager at SGS Industrial Services.

There are many measurements companies need to take before building storage tanks. “The main criteria is to select the right material of construction or the inner lining of the tanks – the material or the coating should be compatible with the products intended for storing,” says Satyabrata Mukhrerjee, terminal

New build and replacement tank storage is a growing market in the Middle East thanks to a boom in downstream projects.

Petrochemical and refi ning complexes require offsite facilities to service the new production units, to handle additional products and also

to support the operations of the company. This include catalysts and chemicals specialist storage facilities and tank farms.

The offsite tank farm is generally located adjacent to the refi nery process units and is integrated to the refi nery’s daily operations. Storage tanks are required to store fresh feedstock, intermediate and component storage is needed for routine operations and blending as well as for fi nal product storage, prior to export and local distribution through a combination of ocean going tankers and road tankers.

Storage Tanks36


Leakage from storage tanks containing oil, gas or chemicals can be caused by the infl uence of weather on the external surfaces which require constant inspection.

Riza Altunergil, sales and marketing manager at Ergil Group. Satyabrata Mukhrerjee, terminal director, Petrochemical ME

director at Petrochemical ME. “The tank should be fi tted with centre sump for easy emptying of the tank,” he adds.

Materials used for the construction of storage tanks are different, but it should be of high resistance. “It varies, but mainly stainless steel tanks are used to avoid the corrosion,” says Riza Altunergil, sales and marketing manager at Ergil Group.

Safety requirements should also be taken before the start of the construction of tanks. “The main issue is always the staff health and safety. In order to avoid any accident, staff have to be trained properly, and at least one health and safety offi cer has to be on site all the time,” says Altunergil.

“Secondly, quality of the fabrication, erection and installation is very important, therefore during all stage quality control has to be done by experts to avoid any mistakes,” he explains.

The duration of product storing differs from one company to the next and from product to product. For Petro Rabigh, the total holding days of feedstock which includes crude oil, butane, hexane-1 and cumene is 21 days.

regional sales manager, Honeywell Field Solutions, Middle East. “Our SmartRadar Flexline radar tank gauge can measure liquid levels down to an accuracy of plus or minus 0.4mm. This radar has Weights and Measures approvals from the Dutch NMi, German PTB and French LNE. In addition is also has OIML approval and meets all the requirements of the relevant API recommendations,” says Moodie.

Meanwhile, for products like LPG, naphtha, gasoline, MEG and propylene oxide the storage duration at Petro Rabigh is seven days.

To measure the content of tank, companies gauge the level of product inside the tank storage, as it helps to know the level of the product. “We offer both radar and servo tank gauging technology to measure liquid levels inside storage tanks,” says John Moodie,

37Storage Tanks

Refining & Petrochemicals Middle East June 2010www.arabianoilandgas.comwww.arabianoilandgas.com

In addition to level, temperature is also a very important parameter when measuring the content of storage tanks.

For gauging and calculation, API D1250 standard is applied, while for overfi ll detection and protection the API 2850, IEC61511 and IEC1508 standards are applied that defi ne the whole life cycle of all kind of installation, including bulk terminals. Those standards are applied to prevent environmental damage and maintain safety.

Leakage Monitoring“Leakage from storage tanks containing oil, gas or chemicals can be caused by the infl uence of weather on the external surfaces, or material can be affected by internal temperature variations. These situations could lead to a disaster. Periodic inspections, conducted in good time, can prevent such disasters from happening,” Nunis explains.

From a commercial point of view, product leakage results in a direct loss of revenue. “From an environmental view, product leakage

can lead to contamination of soil and water courses leading potentially to punitive action from the Environmental Agency and negative corporate publicity,” says Nunis.

In order to reduce the economical as well as the environmental risks, a thorough knowledge of the tank condition, and in particular the tank bottom and outer shell, is of utmost importance.

For the inspection of tank bottoms, companies generally combine two techniques: Magnetic Flux Leakage (MFL) and Ultrasonic Testing (UT). By using these two techniques, corrosion is detected effectively (MFL) and reliably quantified (UT).

“To assess the accurate wall thickness of tank shells we use a rugged remote access ultrasonic crawler,” explains Nunis. “The equipment is designed to allow cost effective ultrasound thickness measurements on above ground ferro-magnetic structures without the need for costly scaffolding or rope access,” he observes.

Generally, tank storage operators use quantitative tank leak detection systems, which prevents physical tank entry, thereby dramatically reducing both the time involved in inspections and costs. “Our tank leak detection system monitors the mass of liquid in the tank over a period of time in order to identify the presence and magnitude of any leakage,” explains Nunis. “Liquid mass is derived from the head pressure at the bottom of the tank. This is measured using a differential pressure transmitter which is located along the outside of the tank,” Nunis adds.

The life span of storage tank varies from facility to another, and can be impacted hugely by the quality of maintenance carried out. “Corrosion control and cathodic protection play important roles fi ghting against corrosion,” says Altunergil. “If you are planning to build a permanent terminal you have to have cathodic protection system to protect steel against corrosion, which is the major issue that shortens the life cycle of any storage tanks or pipelines,” he concludes.

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Number Cruncher38


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

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

Change %

Saudi Basic Industries Corporation (SABIC) 27.07 25.60 -5.73

Saudi Arabian Fertilizer Company (SAFCO) 37.20 35.27 -5.48

Saudi Kayan Petrochemical Company (Kayan) 5.84 5.33 -9.50

Rabigh Refi ning and Petrochemical Company (Petrorabigh) 9.76 8.11 -20.39

Yanbu National Petrochemical Company (YANSAB) 9.47 11.44 17.25

National Industialization Company (TASNEE) 9.33 7.55 -23.67

Saudi Industrial Investment Group (SIIG) 6.56 5.87 -11.82

Saudi International Petrochemical Company (SIPCHEM) 6.40 6.27 -2.13

Sahara Petrochemical Company (SAHARA) 6.80 6.47 -5.15

Advanced Petrochemicals Company (Advanced) 6.48 5.89 -9.95

Nama Chemicals Group (NAMA) 2.83 2.96 4.50

Alujain Corporation (ALUJAIN) 4.95 4.01 -23.26

Methanol Chemicals Company (CHEMANOL) 4.39 4.12 -6.47

Petrochem 5.17 4.51 -14.79

Price on April 19th (US$ per share)

Price on May19th (US$ per share)

Change %

Qurain Petrochemical Industries Company (AL-QURAIN) 0.75 0.68 -10.31

Boubyan Petrochemical Company (BOUBYAN) 1.82 1.89 3.70

Ikarus Petroleum Industries (IKARUS) 0.55 0.53 -5.33


Price on May 19th (US$ per share)

Change %

Industries Qatar 31.21 29.34 -6.37



Change %

Oman Chlorine S.A.O.G. (CHLORINE) 0.93 0.95 1.39



Change %

Abu qir Fertilizers 40.40 38.92 -3.80

Sidi Kerir Petrochemicals Company 2.49 2.32 -6.95

Downstream Data

Number Cruncher38

Most listed petrochemical companies saw share prices declining through May, amid concerns over the debt crisis in Europe.

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

39Number Cruncher


39

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06/0

3/10

11/0

4/10

16/0

5/10

BENZENE (FOB FAR EAST)

US

$/t

on

ne

CFR: Cost and Freight

Benzene prices have declined to $940 per tonne. Plunging crude values was the key factor pushing prices down.

Ethylene prices have declined to $1290 per tonne, following the deteriorating conditions in downstream markets which deepened the bearish sentiment among market players.

MEG prices have declined to $790 per tonne, the lowest level in seven months, on the back of weak crude values, and amid concerns over the debt crisis in Europe.

Propylene have declined to $1260 per tonne, the lowest level in six weeks, amid a lower feedstock prices, and uncertainty about the outlook of the market.

Polyethylene prices have declined to $1275 per tonne, caused by sharp fall in crude and ethylene values.

Polypropylene prices have plunged to $1400 per tonne, due uncertainty in the global economy and the plunge in commodity prices.

PVC prices dropped $10 a tonne to $1020

Our major offering to petrochemical companies are barless container liners and bulk bags FIBC’s (Flexible Intermediate Bulk Containers). We developed our barless liner about 5 years ago for GE Plastics (now SABIC Innovative Plastics). It is saving our customers several hundred thousand dollars per year and is our major claim to fame. We like to think, that the service we offer our customers sets us further apart from the other liner and FIBC manufacturers. We work closely with both management and their workers, who actually use the product. We also work with their customers, following our product to their sites for inspection and to discover any product modifi cations that make it easier for the workers, both the fi llers and the dischargers.

We deal with any solid object; pellets and powder. We aren’t working with liquid at the moment, however, that’s available. We work mainly with polyolefi n’s, including polyethylene and polypropylene.

We have been working with GE Plastics, since 1999, in the US and Europe. We are now introducing our products to SABIC in the KSA. As soon as we get everything set up with them

reach the optimum safety/cost ratio, which is now our barless liner. Of course, we have a patent pending on it and are quite proud of our accomplishment.

The growth potential for my company in this business is astronomical. I’ve been in business since 1974, but was not aware of this industry until 1999, when GE Plastics approached me to see if I could help get them a better product at a lower price. Prior to that, I was producing consumer products in China (from 1986). So, it was my good fortune to be in the right place at the right time. This is an amazing industry fi lled with amazing opportunities. I will be forever grateful to GE Plastics for placing their faith in me and for introducing me to this industry. I feel like I’ve come home.

The Middle East is obviously a very important market. We consider it to be “liner central”, and know that we have something to offer

in our barless liner that can lower the cost of doing

business for everyone and an approach that makes our customers, and their

customers, happy.

in Saudi Arabia, we will open an offi ce there.

According to what I hear, the market is going to be stable; however, I’m seeing an increase in the usage of our products, so something’s happening out there. Our business picked up around the fi rst of this year and has been growing steadily ever since.

Our major challenge is to make sure that both the fi lling sites and the discharge sites are getting the best liner or FIBC they can get. That requires a lot of travel and a lot of talking to the people who are on the line in order to get the business. But, getting the business is not the end of it. It’s just the beginning of the chain. It’s the people on the ground; the people who are working with these liners every day on both sides, fi lling and discharging, that are the important ones. And, that’s the biggest challenge. To make sure that everyone on both sides are happy.

When we first started working with our barless liner, we had the people at the GE Plastics sites around the world to work with on the development of the unit. Most of my time was spent constantly bringing modifi ed liners from our factory in China, to the US and Europe for fi lling, then following the containers to the sites in Asia, India and Australia, to inspect the results. I think our fi rst barless liner could have withstood a nuclear attack, but it cost almost as much as the steel bars we were trying to eliminate. It took 3 years of modifi cations and world travel to

Art Townsend, CEO of AsiaTek, says demand for new logistics products shows market is expecting to see export volumes rise after a stable start to the year

CEO: GROWTH IS BACK


Art Townsend, CEO of AsiaTek.An AsiaTek barless liner.

Face to Face40

If the list is too longto remember, don’t forget one name:

Your gateway to the Petrochemicals and ChemicalsIndustry in the Middle East.

www.gpca.org.ae

Gulf Petrochemicals & Chemicals AssociationTel: +971 4 321 74 44 Fax: +971 4 321 76 77 P.O.Box: 123055 Dubai-UAE

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 manufactures

an extensive range of reliable, highly

accurate and extremely high quality

products relating to the measurement

and generation of temperature.

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Refining & Petrochemicals Middle East - June 2010

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