Lummus Technology

SUSTAINING energy supply and managing consumption are key challenges for governments industry and the public. These stakeholders must continuously remind themselves about the symbiotic link between sustainability energy efficiency and operational efficiency if they are to overcome their escalating energy issues according to Eng Ahmed Al Rashood vice-president of corporate strategy business development and energy management solutions Schneider Electric Saudi Arabia. Al Rashood adds: Today a range of competitive solutions are available that provide quick payback across all installations particularly in terms of energy efficiency. In addition to resolving energy security stakes and managing the gap between energy production and demand Schneider Electric s solutions are particularly industry-renowned for effecting significant reductions on energy bills. Al Rashood s comments came ahead of Schneider Electric s participation at the Saudi Energy Efficiency For...

Despite adverse market conditions the Saudi petrochemical sector is expected to grow this year backed by new production plants and feedstock advantage a report said. NCB Capital forecast that in spite of the lower prices year-on-year (YoY) expected in 2012 the net income for stocks under its coverage will increase 9.1 per cent YoY to SR43.4 billion ( 11.57 billion) in 2012. This is mainly due to an expansion in the production base with the commencement of Saudi Kayan in October 2011 and Sahara s Al Waha plant in April 2011. Though lower prices are likely to limit earnings growth low production cost and proximity to Asian markets will also support earnings in 2012 it said. The sector is expected to be supported by the full year contribution from Saudi Kayan and Sahara s Al Waha plants said the NCB report. In our opinion a strong rebound in demand in the near term is unlikely given the ongoing debt concerns in Europe and the slowdown in China s ...

PIC has achieved a record number of working hours without any accident that waste time of the company which is equivalent to 4 413 days of work and this achievement is the highest in the history of the company since its founding. This achievement comes after a year full of achievements and honours unprecedented in the field of safety health and the environment at locally and globally. GPIC has become the best petrochemical complex in the region after winning the Royal Society for Prevention of Accidents (RoSPA) from the UK the highest award in this category and the Robert W Campbell award from the US. The company was able to win the award outperforming the approximately 5 000 major international companies which is an unprecedented achievement in the chemicals sector. In the past 11 years the company had won 10 awards. The company also won this year as well a safety award from the British Safety Council for the fourth time in a row. In the area...

Qatar Petroleum and Qatar Petrochemical Co (Qapco) will build a 5 billion petrochemical complex in the Gulf Arab state the companies said. The plant to be located at Qatar s Ras Laffan industrial city will produce petrochemical products mainly to be sold to high-growth markets in Asia Africa and Latin America the country s energy minister Mohammed Al Sada said at the signing ceremony. The plant which will include a steam cracker will produce 1.4 million tonnes per annum of ethylene 850 000 tonnes per annum of high-density polyethylene 430 000 of linear low-density polyethylene 760 000 tonnes per annum of polypropylene and 83 000 tonnes per annum of butadiene. It will be jointly developed by QP and Qapco and will be operational by 2018 Sada said. It will be a valuable contributor to our future GDP growth the minister said. Qapco is jointly owned by Industries Qatar with an 80 per cent stake and France s Total ...

THE petrochemical industry in the Middle East has seen a significant progressive rise due to the region s infrastructure and feedstock advantage. Saleh Al Nazha president and chief operating officer of Tasnee a key speaker at Middle East Chemical Week 2011 says two of the key factors ensuring the consistent growth of the petrochemical industry are population growth and lifestyle. The United Nations recently estimated that the global population would increase to 8.9 billion by 2050. In addition the lifestyles of people are improving with an immense demand for commodity materials. Al Nazha says: Economic growth is imminent because there is a specific emphasis on the trends that are being reflected by the largest spenders. The level of consumption in China has grown because the lifestyle of the Chinese has grown. Therefore growth with respect to commodity products is likely to continue in this region. There are likely to be lifestyle improvements for Me...

THE next decade will witness a significant change in the way the Middle East s petrodollars are spent. Previously the major oil exporters concentrated most of their effort and investment into developing the infrastructure to fully exploit their hydrocarbon reserves. But increasingly their money will be directed to diversifying their industrial bases. Oil and gas production will continue to play a dominant role and most of the new industrial capabilities being developed will be downstream from refineries and require some form of hydrocarbons as feedstock. Click here to view Major GCC petrochemical Projects chart LOW-COST ADVANTAGE Petrochemicals manufacturing is set to constitute the main part of the region s industrial base in 2020 due to the Middle East s access to low-cost energy and feedstocks. According to regional projects tracker Meed Proj...

THE proposed expansion of Sohar Refinery is expected to boost production of adjoining downstream petrochemical industries. The additional feedstock requirements of both Aromatics Oman and Oman Polypropylene will be met through this expansion. This will boost our petrochemical production especially in Sohar industrial area Mohammed bin Hamed Al Rumhy Minister of Oil and Gas says after signing an agreement for front-end engineering design (FEED) and project management consultancy (PMC) with CB&I Lummus. The pact was signed on behalf of Oman Oil Refineries and Petroleum Industries by Al Rumhi and Scott Wiseman vice-president of CB&I Lummus. These contracts are linked to a massive expansion of Sohar Refinery to take the total refining capacity to 187 000 barrels per day (bpd) from 116 000 bpd now. The expansion project with an estimated capital expenditure of 1.5 billion will be completed in 2015. Elaborating on the new product streams Al Rumh...

ROYAL Dutch Shell the largest investor in Qatar and state-run Qatar Petroleum agreed to jointly study an estimated 6 billion petrochemicals project in Qatar. The 1.5 million-metric-tonne monoethylene glycol plant may be built by 2016 in the industrial city of Ras Laffan former oil minister Abdullah bin Hamad Al Attiyah says. Other olefin derivatives would boost the plant s output to more than two million tonnes of finished products Royal Dutch Shell says. Qatar holder of the world s third-largest gas reserves is investing in petrochemical aluminum and fertiliser factories as it diversifies its economy away from exporting liquefied natural gas and crude oil. The Gulf country aims to increase annual petrochemicals production to at least 18 million tonnes by 2015- 16 Al Attiyah says. This new project will combine Shell s experience and technology with the ambition of the state of Qatar to create further value from its natural gas resources ...

REFINERY and petrochemical integration is not just an option but a necessity says Bakhit Al Rashidi deputy managing director planning and local marketing Kuwait National Petroleum Company (KNPC). The largest refiners in the region including KNPC will be part of the high-level industry line-up at the upcoming Middle East Downstream Week taking place in Abu Dhabi from May 8 to 11. KNPC s Dr Al Rashidi says regarding integration: cyclic trends in refining margins and a thin band of margin operation for overall profitability make integration essential to even out the margin vagaries. All new refinery projects essentially incorporate integration with petrochemicals as much greater savings in investment cost and operating costs would result. GAS TO ASSUME IMPORTANCE With regards to the medium term outlook for the refining industry Dr Al Rashidi feels gas development will assume more importance espe...

PRICES in the 3 trillion global petrochemicals business declined for the third consecutive month in June causing the Platts Global Petrochemical Index (PGPI) a basket of petrochemicals prices expressed in dollars per metric tonne to drop to 1 051 per tonne on June 30 the lowest level of 2010. Industry sources say the recent decline in petrochemicals prices can be traced to several factors including a slowdown in demand and over-production that occurred as manufacturers sought to capitalise on the run up in prices since January 2009. The drop off in the prices of these industrial raw materials is beginning to raise eyebrows in the analyst community with many questioning if they re suggestive of a double dip for the economy says Shahrin Ismaiyatim Platts global editorial director of petrochemicals. Some analysts look at indices like PGPI to predict economic trends and for the last couple months it looks like petchem feedstock price declines and e...

IN THE not-so-distant future the Middle East will be the foremost global hub for the petrochemicals industry according to Margaret R Walker global vice president for engineering solutions technology centres and manufacturing and engineering work processes at The Dow Chemical Company. Speaking at the Middle East Petrotech 2010 conference and exhibition Walker also highlighted Dow s active participation in the growth of the region s petrochemical industry its successful partnerships and joint ventures in Kuwait Saudi Arabia the UAE and Egypt. Walker was leading a delegation of Dow engineering and commercial experts who delivered technical presentations and engaged with event delegates at the energy industry s leading conference and trade exhibition held in Bahrain. Her 36-year career with Dow includes small medium and mega capital project development around the world and also leading a global workforce of approximately 2 000 employees with substantial acti...

AFTER a roller-coaster ride in the last six months growing demand for petrochemicals in Asia suggests the worst of the global economic downturn could be over for producers. However the industry s reliance on oil and gas as feedstocks for plants means costs and therefore profit margins are subject to price fluctuations in the global energy markets. After reaching a 2009 high of 72 a barrel in mid-June up from January s price of about 45 a barrel crude oil prices settled at about 60 a barrel throughout July. Over the same period natural gas prices fell by 40 per cent to 3.27 a million British thermal units (mmBtu) from 5.40 a mmBtu in January compared with a 12-month high of 13.01 a mmBtu in July 2008. As gas is the feedstock used to produce many petrochemicals lower gas prices should in theory exert a downward pressure on the prices of petrochemicals products. But according to industry experts crude oil will continue to dictate petrochemical...

QATARI oil minister Abdullah bin Hammad Al Attiyah has urged the GCC to set a specific agenda and a fixed time frame for renewed free trade talks with the European Union (EU) which he said had taken a protectionist attitude to the region s petrochemicals industry which they consider to be uncompetitive. The Europeans have decided to return to negotiations and I would advise the GCC states to negotiate on the basis of a specific agenda and a fixed time frame so that we don t waste another twenty years of negotiations that will go on forever the official Qatar News Agency (QNA) quoted Attiyah as telling GCC industrialists. He added that the talks should focus on pertinent issues and should not involve irrational issues that have nothing to do with free trade referring to previous attempts by EU negotiators to bring in politics and human rights issues into the free trade talks. Sometimes politics was introduced and at other times they exploited the h...

Saudi Aramco and Dow Chemical are looking for firms interested in building the first stage of a giant joint-venture petrochemical complex in the kingdom contractor sources said. They issued a solicitation of interest a few days ago said a source at a contracting firm that received the offer. Everybody hopes this means they are going ahead with the project. Aramco said earlier this month that the petrochemical plant would start up in 2015 two years behind the initial schedule. It has also delayed plans to expand capacity at the Ras Tanura refinery by 400 000 barrels per day (bpd) which will supply the petrochemical feedstock. The state oil giant has delayed several large projects to save money on contracting costs. Aramco wants project bids to reflect the slump in commodity labour and equipment prices with the global economic downturn Project cost estimates rose rapidly with the rally in commodities prices into 2008. Dow s investment in the 20-bil...

THE global petrochemical industry is facing a difficult and challenging environment as large and new capacities of petrochemical products are planned to come on stream at the time when global growth will be slowing says Mohamed Al-Mady chairman Gulf Petrochemicals and Chemicals Association (GPCA) and vice chairman and CEO Saudi Basic Industries Corporation (Sabic). Past periods of difficulty for our industry have led to bursts of innovation in processes and products. Clearly research and development activities will be an important element in leading to the evolution of a stronger industry when emergence from this difficult period arrives down the road says Al-Mady at the the 3rd Annual Forum of the GPCA. The current financial crisis started in the US with issuance of sub-prime home mortgages and the subsequent repackaging of these mortgages into high risk and complex derivative products. These derivative products were traded around the world by highly lever...

COMPARED with the quick-paced developments of Saudi Arabia Qatar and Iran over the past five years Abu Dhabi has been a relative laggard in developing its petrochemicals industry. This is a little surprising given the UAE s substantial gas reserves of 214 trillion cubic feet (tcf) almost 200 tcf of which lie in Abu Dhabi. This is 4 per cent of the global total giving the federation the fifth-largest gas reserves in the world and provides the ideal springboard for petrochemicals development. With a small population and massive oil reserves historically there has been little incentive to develop a local petrochemicals industry. Aside from the urea-based fertiliser production at Ruwais Fertiliser Industries (Fertil) set up in 1982 it was not until 1998 that Abu Dhabi entered the basic chemicals industry with the creation of Abu Dhabi Polymers Company (Borouge). The first phase of Borouge a joint venture of Vienna-based Borealis and state-owned Abu Dhabi Natio...

THE costs of building new oil refineries and petrochemical plants have continued to rise reaching an all-time high in the first quarter period ending in March according to the IHS/Cambridge Energy Research Associates (Cera) Downstream Capital Costs Index (DCCI). The DCCI rose from 166 to 176 points over the past six months an increase of six per cent. The values are indexed to the year 2000 meaning that a piece of equipment that cost 100 in 2000 would cost 176 today. The index shows that costs are continuing their sharp rise which is having a major impact on the timing of projects and the price oil says Daniel Yergin chairman of Cera and executive vice president of IHS. The DCCI like its upstream counterpart the Upstream Capital Costs Index provides a framework for understanding these cost challenges. The latest cost increase has been driven by a high number of active projects keeping downstream specific markets such as engineering and specialised equ...

SAUDI Arabia has hit on an ingenious idea to raise finance for projects. Major petrochemicals schemes have been asked to list 30 per cent of their shares on the Tadawul even before they are completed. The Saudi project finance market is unique. As the focus of global project finance activity shifts to the GCC the kingdom is leading the way with about 250 billion worth of projects seeking an estimated 175 billion in project finance over the next three to five years. Beyond the scale of project finance activity under way Saudi Arabia is notable for another reason: it is the only project finance market where stakes in certain projects in development must be sold to the public. These share sales constitute some of the biggest initial public offerings (IPOs) in the kingdom and the largest listed companies. Shares in Saudi Arabian Mining Company (Maaden) will go on sale in 2008 and raise 2.5-2.7 billion. The offering of shares in the government-owned company will bo...

Asian demand for petrochemicals is expected to exceed the combined demand of the United States and Europe within two years Saudi Basic Industries Corp (Sabic) said. Petrochemicals producers in the Middle East where cheap access to energy encouraged large investment in the industry will benefit from the expected demand surge said Sabic chief executive Mohamed Al-Mady. Growth in global demand was a catalyst for growth in these industries especially in China and Pacific Asia ... where demand is the expected to exceed within two years its level in the United States and Europe put together he told a conference. Output from the Middle East will account for 17 per cent of global output by the end of 2010 against 10 per cent at the beginning of 2000 said Mady whose firm is the world s largest petrochemical company by market value. Growth in global demand was as fast as growth in production capacities he said. Demand in China is growing at an annual 10 p...

Saudi Basic Industries Corp (Sabic) is considering a deal with state-oil company Saudi Aramco to upgrade a Red Sea Coast refinery and build a petrochemicals complex there a magazine reported. A deal would give Sabic the world s largest chemical maker by market value access to Aramco feedstock and allow the state oil firm to press on with plans to develop its Yanbu project without a foreign partner the Middle East Economic Digest said. Any tie-up between the two companies would have the blessing of the Saudi government the London-based weekly said in its latest edition citing unnamed industry sources. The Yanbu venture is one of three refinery and petrochemical plants belonging to Aramco the world s largest oil company by production. The other two Rabigh and Ras Tanura are joint ventures with Japan s Sumitomo Chemical Co and the Dow Chemical Co of the United States. Aramco announced plans for Yanbu in 2005 including upgrading the 235 000-barrel-a-day re...

China aims to nearly triple petrochemical output in Shanghai to more than 33 billion annually by 2010 a plan analysts said would require the building of at least two more world-scale ethylene plants. Analysts say the city could have trouble attracting new investment due to overcapacity fears a string of plants are due to start up across Asia in 2005 throwing at least 2.8 million tonnes of annual capacity onto the market. Still China aims to more than double capacity for ethylene the building block of plastics and other chemicals to over 12 million tonnes per year (tpy) by 2010 to sate demand forecast to rise in line with annual economic growth of over 7 per cent. Petrochemicals output in Shanghai alone should top 280 billion yuan ( 33.8 billion) in 2010 after hitting 180 billion yuan in 2007 Xu Jianguo a city deputy secretary-general has been cited as saying in the Shanghai Daily. Output in 2003 stood at 106.5 billion yuan. Oil ma...

China s top ethylene producer Sinopec Shanghai Petrochemical Co Ltd is planning a 55 per cent rise in output capacity in the next few years adding to a wave of expansion in the sector a company official said. Shanghai Petrochemical expects to add about 500 000 tonnes per year (tpy) to its current ethylene capacity of 900 000 tpy. The project pending Beijing s approval possibly around early 2005 will take about two years to complete the official said. China is importing half of the petrochemicals it consumes and that supply gap is not going to decrease in the short term despite new capacity in Asia and the Middle East company spokesman Zhang Jingmin said from Shanghai. The plan comes on the heels of a string of new cracking units due to start operation from 2005. China aims to more than double its ethylene capacity to exceed 12 million tpy by around 2010 to meet demand forecast to rise at least in line with its nine per cent economic growth. With Chin...

Qatar formally opened a fourth expansion project on at Qatar Fertiliser Co or Qafco which makes the Gulf Arab state a leading producer of urea and formed a newilling firm with Japan Drilling Co. The project built at a cost of more than 2 billion riyals ( 549 million) includes a new ammonia unit with a capacity of 2 000 tonnes per day and a new urea unit with a capacity of 3 200 tonnes per day - raising QAFCO s annual output capacity to 2.0 million tonnes of ammonia and 2.8 million tonnes of urea. Qafco is one of Qatar s slew of petrochemical projects designed to cash in on its mammoth gas reserves the world s third largest. The firm is 75 per cent owned by Industries of Qatar and 25 per cent by Norway s Yara International. Qafco signed a 400 million loan in 2001 with a group of regional and international banks to partly finance the expansion project with associated supporting facilities. Qatar Petroleum and Japan Drilling Co also signed an agreement t...

China s top ethylene producer Sinopec Shanghai Petrochemical Co Ltd said it aims to raise capital spending by some 48 per cent this year to fund plant expansion and renovation. Shanghai Petrochemical said it has budgeted for capital spending of 1.9 billion yuan ( 229 million) versus 1.28 billion yuan the previous year. The firm reported its 2003 net profit jumped nearly 53 per cent to 1.40 billion yuan with demand from China s booming economy contributing to a hike in petrochemical prices. The firm a unit of Asia s largest refiner Sinopec Corp is expected to benefit further from firm demand this year as it rides an upturn in the cyclical petrochemicals market. Shares in Shanghai Petrochemical closed unchanged at HK 3.35 after the announcement. The stock has gained nearly 158 pe r cent in the past year but fell more than four per cent in the most rtecent month. The company said the capital spending is for the expansion of its purified terephthalic acid (PTA)...

Such are the industrial policies in Saudi Arabia that it is perhaps inevitable that the impressive diversification into petrochemicals - as evidenced in the industrial cities of Jubail and Yanbu - should be intrinsically linked to Saudi Aramco. Jubail in particular looks set to be a major beneficiary of Saudi Aramco s efforts to tap plentiful cheap gas resources. Jubail and Yanbu stand today as world-class examples of Saudi Arabia s industrial might and the numerous huge modern petrochemical facilities are ample evidence of a successful policy by the government to diversify the economy away from a reliance on crude oil revenues. Jubail Industrial City is being further developed to meet industrial needs. That is new infrastructure projects such as sea water cooling channels pipeline corridors and road networks and the major new Park West development. The significance of an industrial expansion of Jubail and Yanbu industrial cities cannot be overstated. Appr...

Singapore s successes in it s refining industry this year were in no small way defined by the announcement this year from Sumitomo Chemical Co and the Royal Dutch Shell Group that they will expand joint petrochemical production facilities in the country. The two firms will expand ethylene facilities almost doubling annual production capacity to 2 million tonnes. Total investments in the expansion including investments in facilities for the production of derivative products such as synthetic resins are estimated at 200 billion yen (US 1.69 billion). The partners aim to keep pace with Asian petrochemical product demand which is growing at an annual rate of 8 per cent. The current ethylene production site is located on Jurong Island which is off the southern coast of the main island of Singapore. The site has two lines with a combined annual production capacity of 1.09 million tons. New facilities with an annual production capacity of 1 million tons are to...

The Philippine National Oil Company - Petrochemical Development Corporation plans to inject 100 million-worth of equity into phase one of the proposed 1.2 billion naphtha cracker being planned for Bataan province. The injection is said to be in line with the company s plan to hold a 34 per cent stake in the project. To be built in several stages the first phase of the naphtha cracker is expected to cost around 600 million which will be funded through a combination of debt and equity. PNOC will select an adviser to handle financing requirements for the project by the third quarter of this year according to reports. The capacity of the cracker which will be the first in the Philippines will be one million tonnes per year (tpy) up from the original 600 000 tpy originally planned after studies indicated possible market expansion in the next few years. PNOC is also said to be still talking with possible joint venture partners including...

The petroche-mical industry of the Gulf Cooperation Council (GCC) and Saudi Arabia in particular has grown enormously since the commissioning of an ethylene plant in Qatar in 1981. The expansion programmes since that time have been led by Saudi Basic Industries Corporation (Sabic) a majority-owned government enterprise which is now one of the world s leading petrochemical players. Cooperation among GCC petrochemical producers hitherto limited to Saudi Arabia is set to gain momentum in an increasingly competitive business environment according to Dr Abdul Wahab Al Sa doun director of the Industrial Information & Coordination Dept at the Gulf Organisation for Industrial Consulting (GOIC) Doha Qatar. Saudi Arabia accounts for 84 per cent of total GCC petrochemical output followed by Qatar (eight per cent) Kuwait (six per cent) and Bahrain (two per cent). These shares are likely to change by 2004 when new petrochemical projects come to fruit...

Asia will set the pace for growth in demand for petrochemicals over the next decade and will probably remain a net importer despite new plants sprouting across the region a senior industry official has said. Rein Willems executive vice president at Shell Chemicals Ltd said the annual growth of Asian petrochemical demand was seen at 7.3 per cent between 2000 and 2010 while the global industry average was expected to hover at 3.5 per cent. Willems said that much of the growth would centre around China. Asia will continue to set the pace in demand growth Willems said. But despite the number of petrochemical projects coming up in the region Asia will remain a net petrochemicals importer for the next 10 years. It might seem like the market is oversupplied at the moment but that won t be the case five maybe 10 years from now he said. Willems said China was considering eight blueprints by several oil majors to build naphtha crac...