Qapco, one of the leading producers of ethylene and the biggest producer of low-density polyethylene (LDPE) in the Middle East, is confident that the completion of its ongoing expansion projects will make it an even more significant player in its sector.

In the first five months of 2005, Qapco’s net profit increased by 78 per cent to reach QR660 million ($181.3 million) compared with QR371 million in the same period last year. The company witnessed a 47 per cent surge in the sales turnover, which reached QR836 million from QR571 million.
“With the trend likely to continue through the end of the year, we are expecting strong results for the full year,” a Qapco spokesman said. The company made QR1.2 billion in 2004 in net profit against QR705 million in 2003.
In 2004, Qapco sold 159,051 tonnes of ethylene, 361,586 tonnes of LDPE and 50,401 tonnes of sulphur. The net FOB sales turnover  increased 41 per cent and reached QR1.7 billion.

Three projects
Qapco is currently undertaking expansions involving three major projects. One of them is the $220 million Ethylene Cracker Expansion Project (EP2), which entails expanding production of ethylene from 525,000 tonnes per year (tpy) to 720,000 tpy.  Start-up is expected in the third quarter of 2006. The engineering, procurement and construction (EPC) contractor on the job is Japan Gas Company (JGC).  The technology supplier is Stone & Webster.
The project also includes the integration of the Qapco debutaniser with the Q-Chem depropaniser steam, in order to produce 44,000 tonnes of fully hydrogenated gasoline, which will be supplied to QP and constitute the prime benzene source for the upcoming LAB project. It will also produce a fully hydrogenated propane/butane mix to the tune of 56,000 tonnes, which will be added to the QP-NGL production of LPG.
In the second project, a joint venture company Qatofin will create a polyethylene unit. The joint venture partners are Qapco (63 per cent), Total Petrochemicals (formerly Atofina) (36 per cent) and Qatar Petroleum (QP) (1 per cent). The plant will produce linear low-density polyethylene (LLDPE) of a capacity of around 450,000 tpy, expandable to 600,000 tpy. The project is expected to be completed by the end of 2008. The start-up will coincide with the Ras Laffan cracker project. The feedstock ethylene will be delivered through a pipeline from Ras Laffan to Mesaied, where the plant is to be located.
Pre-qualifiers for the Qatofin EPC package now include US-based Bechtel, Japan’s Mitsubishi Heavy Industries, Italy’s Snamprogetti and Germany’s Linde and the EPC award is expected in the fourth quarter of 2005. Construction is expected to commence in the third quarter of 2006.
The Ras Laffan cracker, the third project, will be set up in a joint venture between Qatofin (45.69 per cent), Q-Chem II (53.31 per cent) and QP (1 per cent). The plant will have the capacity to produce 1.3 million tpy of ethylene, expandable to 1.6 million tpy. The Ras Laffan cracker will be one of the world’s largest ethane cracker plants. The ethane feedstock is to be supplied from the adjacent AKG Enhanced Gas Utilisation (EGU) project and the Dolphin project. Qatofin’s share of the ethylene production will be 45.69 per cent. 
Total investment in Qatofin polyethylene and in the share of Ras Laffan Cracker is estimated to be around $900 million.
Established in 1974, as a joint venture between Qatar General Petroleum Corporation (now Qatar Petroleum) and Atochem France and Enichem Italy, Qapco underwent its first expansion in 1994. The $385 million expansion saw the company enhance its production capacity of ethylene to 525,000 tpy and LDPE to 360,000 tpy.
Current shareholders of Qapco are Industries of Qatar (70 per cent) and Total Chemicals of France, a wholly owned subsidiary of TotalFinaElf.

Hard sell
“Our decision to open self-operated offices in various strategic markets around the world has given our marketing network, which presently spans over 75 countries, a further boost,” says the company spokesman. Currently, Qapco operates commercial and representative offices in China (Hong Kong, Shanghai, Beijing); Pakistan (Karachi, Lahore); Egypt (Cairo); Syria (Tartous); India (Mumbai, Delhi, Chennai) and the UAE (Dubai).
“Plans are also under way to establish an office each in Taiwan and Bangladesh by 2005,” the spokesman says. “We also have a warehouse in Syria that serves the entire Middle East Market. Our offices keep us in constant touch with the needs of the respective and surrounding markets and help us to meet their requirements in a superior manner.
“We are constantly seeking ways to expand the scope of our marketing network. Presently, we are selling a part of the HDPE production of Q-Chem as well as various products of QVC. We also have marketing arrangements with Reliance to sell polypropylene on its behalf and with Total Petrochemicals, our shareholders, to sell its various products.”
Year 2004 saw the implementation of a ‘preventive maintenance’ programme in all the company’s maintenance activities in order to ensure the reliability of its equipment. The programme calls for a deviation from the traditional ‘fix it when it breaks’ management to predictive and production management (anticipating, planning and fixing it before it breaks).
“Last year, the various shutdowns in LDPE-2 had kept the maintenance department busy all through the year, and thanks to the team’s concerted efforts, all our plants are functioning as per their design capacities,” the spokesman said.
 The company stresses that the standards it has set for itself reflects the high priority it places on quality. “Our commitment to comply with the requirements of ISO 9001:2000 is unwavering. We are following the basics laid down by the eight management principles in this regard and are guiding our workforce accordingly. We recognise the need for establishing a more encouraging work environment with performance-based rewards for both teams and individuals.
“We have continued to reinforce our quality management system by improving our performance-measurement and performance-management systems, which we believe, will provide us with precise key performance indicators of our progress so far and would be the basis for all future plans,” the spokesman said.