Home / Why will the GCC remain a chief petchem producer?
Why will the GCC remain a chief petchem producer?by Jyotsna Ravishankar on Jan 9, 2013
The days of plentiful low cost feedstock maybe over for the Middle East... but the region is still attractive to investors with second-order benefits, such as competitive utility costs and financing, says Bahrain-based Graham Hoar, Vice-President, Middle East from Nexant speaking to Refining and Petrochemicals Middle East.
Hoar was answering a question on the huge capacity the region was creating for petrochemical production and if the growth was sustainable.
The Middle East, according to Hoar, has already made announcements with regard to world-class complexes and the region has certain structural advantages which always makes it exciting for investors.
After Saudi Arabia, Qatar has the next largest GCC petrochemical plans, he added.
The availability of NGLs (including Ethane) coupled with the drive to compete globally in the petrochemical market works to Qatar’s advantage, said Hoar.
In Qatar, production of chemicals and petrochemicals is expected to double by 2020, reaching 23m tonnes per year (tpy), up from 9.3m tonnes at present. Qatar Petroleum (QP) will be looking to finance $10 billion to $13 billion worth of projects in 2014, the head of project finance, Meshaal Al-Mahmoud said recently.
QP plans to spend as much as $25 billion over the next five years on projects, Al-Mahmoud has said. Most of the planned projects will increase the petrochemical capacity of the tiny, gas-rich country.
The projects include a planned $6.4 billion petrochemical plant done in partnership with Royal Dutch Shell and a $5.5 billion plant in partnership with Qatar Petrochemical.
There are also talks of an aromatics plant in the Ras Laffan Industrial Area. While Qatar is definitely more aggressive in planning new projects, it is Iran which has the larger gas reserves that could feed potential petrochemical industries.
“Iran has ambitious petrochemical plans. International sanctions and internal delays are slowing them down, that’s it. Let’s not ignore them as they have the feedstock and that is the key driver for petrochemicals,” Hoar says.
National Petrochemical Company (NPC) of Iran recently said it intends to issue $490 million in bonds to finance petrochemical projects. The bonds will be issued in autumn 2012, said NPC managing director, Abdolhossein Bayat, according to Shana news agency.
On April 18, Bayat said that Iran exported $14 billion worth of petrochemical products to 60 countries between March 2011 and March 2012. He added that $10.5 billion of oil income will be allocated for the development of the national petrochemical industry.
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