New Energy market report from Business Monitor International: "Kuwait Petrochemicals Report Q3 2013"
Boston, MA -- (SBWIRE) -- 08/05/2013 -- Kuwait's petrochemicals industry is enjoying solid performance in spite of a slowdown in key Asian markets and an increasingly competitive environment, due to strong margins and a favourable product mix. However, expansion plans could be derailed by delays and resulting increases in costs, putting at risk Kuwait's objective of securing another surge in capacities over the medium term.
BMI believes the Kuwaiti petrochemicals industry was operating at capacity in H113, although recent financial data indicate that margins are not improving. Nevertheless, the Kuwaiti petrochemicals industry is proving resilient in a highly competitive market and will retain operating rates even as Asian markets such as India and China become more self-sufficient. This strong performance is noted in operational data which show that some of Equate's facilities are producing at above nameplate capacity. The situation has prompted Equate to invest in debottlenecking its 825,000tpa HDPE/LLDPE swing plant and a 550,000tpa MEG unit, as well as ethylene production with completion set for 2015. The additional capacity it will provide is unclear. Meanwhile, Karo is looking to develop its production facilities and improve the performance and flexibility of its aromatics complex.
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Over the last quarter BMI has revised the following forecasts/views:
- The timescale for KPC's Olefins III project is set to slip to 2017, which could add US$4bn to the total cost and potentially lead to scaling back of planned capacities. Originally scheduled for 2015, the complex is to be based on a mixed-feed cracker with capacities of 1.4mntpa ethylene and around 600,000tpa propylene, using gas and liquid feedstocks. Downstream facilities will produce up to 800,000tpa PE and up to 600,000tpa EG. Olefins III will boost Kuwait's ethylene capacity to 3.1mntpa, while PE will nearly double to 1.6mntpa. Any further delay would adversely affect the project as it would further diminish revenues that could have been generated had it become functional at an earlier date.
- KPC paid US$2.2bn in compensation to Dow Chemical in a final resolution of the dispute between the two companies over a failed joint venture plan that collapsed in 2008. The payment by the Kuwait stateowned oil group represents most of the compensation Dow was owed, but Kuwait has stated there will be no recriminatory action over the award.
- Kuwait's petrochemicals rating is 60.5 points this quarter, unchanged since Q213. As a result, it remains in fourth place, 0.1 points behind Qatar and 3.1 points ahead of Israel.
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