Qatar’s petrochemicals sector, thriving from the availability of cheap fuel from local sources, was one of the brightest spots of Qatari industry along with oil and gas.
It has lined up plans to set up new ventures or enhance production to meet growing demands from international markets.
The state also made unprecedented progress towards gas-to-liquids production, signing up top international companies for projects.
Qatar Petroleum and Exxon Mobil Chemical Company, a division of Exxon Mobil Corporation, recently signed a Statement of Intent to conduct a feasibility study for a world-scale ethane-based cracker and ethylene derivates complex in Ras Laffan Industrial City. According to plans, ethane from new gas development projects in Qatar’s North Field will be utilised by the complex for making products to be marketed in Asia and Europe.
“We believe the proposed project will serve as a platform for future growth to assist the State of Qatar in its goal of becoming a leader among petrochemical producers in the region,” said Daniel S Sanders, president of Exxon Mobil Chemical Company.
A methanol plant with capacity of two million tonnes per year (tpy) is coming up as a joint venture between Qatar Fuel Additives Company (Qafac) and Taiwan’s Chinese Petroleum Corporation. The Taiwanese company is one of the founding stakeholders in Qafac and the proposed facility will be the largest methanol plant in the world. Methanol is a feedstock of chemical industries, produced from methane. Most of the methanol produced at the $540 million plant is to go to the Far East. A German company has been awarded the engineering contract for the plant.
Qafac, meanwhile, posted a profit of $74.5 million in 2003, a 133 per cent increase over 2002, thanks to higher sales prices and savings in interest charges as a result of refinancing and equity restructuring. The company produced last year 773,000 tonnes of methanol and 572,000 tonnes MTBE (methyl tertiary butyl ether).
Qafac was not the only petrochemicals-related company to make big profits. Qatar Petrochemical Company (Qapco) announced a record net profit of $193.7 million for 2003, up 73 per cent over the previous year.
Qapco is increasing its ethylene production capacity to 720,000 tpy from 525,000 tpy, the project for which is to be completed by mid-2006. JGC Corporation received the EPC contract while the technology supplier will be Stone and Webster. The company is also involved in the Qatofin project with Atofina for the production of polyethylene of 450,000 tpy capacity. A joint venture plant to be jointly built by Qatofin and Q-Chem will provide the ethylene feedstock for the polyethylene plant
Qatar Vinyl Company, a joint venture between Qapco, QP, Norsk Hydro and Atofina, increased its production by 15 per cent of its nameplate capacity and recorded a net profit of around $13 million in 2003.
“Qapco has emerged as one of the most reliable suppliers of low density polyethylene (LDPE) in the world market,” said its vice chairman and general manager Hamad Rashid Al Mohannadi. LDPE production in 2003 was 384,486 tonnes against 379,172 tonnes in the previous year.
Oil and gas will continue to be the mainstay of the economy with initiatives having been launched for new projects particularly in the gas sector.
One of them is the Exxon Mobil-QP venture to build a $7 billion gas-to-liquids (GTL) plant at Ras Laffan with a capacity of 254,000 barrels per day (bpd) of petroleum products including sulphur-free diesel, lubricants and naphtha. Completion time for the plant is 2011.
QP and Royal Dutch/Shell have signed an agreement to build a GTL plant of 70,000 bpd, production of which could rise to 140,000 bpd in 2011.
Ras Laffan Liquefied Natural Gas Company Ltd is involved in ventures that will deliver more than 36 million tpy of LNG to Korea, India, Europe and the US by 2011.
And substantial natural gas reserves from Qatar’s offshore North Field are being developed with a view to having them processed onshore at Ras Laffan and piped to the UAE under the Dolphin Gas Project, which is majority-owned by the Government of Abu Dhabi.
Away from hydrocarbons and petrochemicals-related industries, one of Qatar’s leading companies, Qatar Steel, which has announced a major expansion project, signed a long-term contract with Luossavaara-Kiirunavaara AB (LKAB) for the purchase of iron ore pellets. The contract is for a total of 3.5 million tonnes and the supply period begins from 2005 lasting until 2010. Its general manager, Sheikh Nasser bin Hamad Al Thani, said the company was geared to achieving production of 1.5 million tonnes in 2005 against 1 million tonnes in 2003.
Qatar Cement Company is raising clinker capacity by 1.32 million tpy against a total capacity of 900,000 tpy in two existing plants manufacturing ordinary Portland cement and sulphur-resistant cement. A French company has been contracted to build the new kiln at a cost of $158 million.
