Boston, MA -- (SBWire) -- 02/11/2013 --This quarter's report will focus on the potential negative impact of the Chinese economic slowdown and the rapid growth of Asian petrochemicals industries on Qatar's petrochemicals market. It will also offer an evaluation of the possible drawbacks stemming from Qatar's use of ethane feedstock in a context of growing regional demand for ethane. The report also assesses the positive effects of a booming construction industry and rising consumer spending, which have resulted in increased domestic demand. Equally, the vacuum left by the sanctions against Iran has created opportunities for Qatar, as has growing Chinese and Indian petrochemicals demand.
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Qatar's petrochemicals industry has registered steady growth, despite a number of possible drawbacks, such as those listed above. Qatar's fully integrated industrial cities (Mesaieed and Ras Laffan) have enabled the petrochemicals industry to capitalise on the country's vast and accessible natural gas deposits. A number of large oil and gas majors continue to be drawn to the Qatari hydrocarbons industries, despite the somewhat restrictive government cap of 49% foreign ownership. This has benefitted the petrochemicals industry in both the upstream (providing more gas for feedstock) and downstream, allowing domestic companies to take advantage of the technology and expertise of the international oil companies (IOC). Additional oil and gas production ensures that even though domestic and regional gas demand is rising, there will still be enough left over to maintain and even expand the petrochemicals industry.
However, cracker capacity has expanded faster than gas production. This has pushed the government into halting new projects until 2014 - while it evaluates sustainable rates of gas production. Notwithstanding this development, there are still a number of projects currently under construction and nearing completion. These include:
- In June, the Qatar National Bank Group (QNB) agreed to finance Qatar Fuel Additives Company Limited (QAFAC)'s construction of new carbon dioxide (CO2) recovery plant which, when completed, will be the largest in the region. QAFAC signed a corporate loan agreement with QNB for US$80mn to fund this CO2 recovery plant, which will be located in the Mesaieed Industrial City. This project will take approximately two years to complete and is expected to be operational in 2014
- Qatar Fertiliser Company (Qafco) is building another ammonia and urea plant, Qafco-6, which will be inaugurated by the Emir H H Sheikh Hamad bin Khalifa Al Thani on December 11 2012. Qafco Chairman Abdulaziz bin Ahmed Al Malki said that the project was the culmination of Qafco's ambitious plans for development and modernisation.
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Market Report, "Qatar Petrochemicals Report Q1 2013", Published
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