New Energy market report from Business Monitor International: "Kuwait Petrochemicals Report Q3 2014"
Boston, MA -- (SBWIRE) -- 06/03/2014 -- While Kuwait's Petrochemical Industries Company (PIC) plans to increase its petrochemical income to make up more than 50% of the country's non-oil income, BMI's latest Kuwait Petrochemicals Report states that further value added to petrochemicals is essential to developing the production chain and ensuring that the industry is buffered from the effects of increased competition in external markets.
Kuwait has formidable reserves and growing upstream production, which should sustain petrochemicals output. A diverse feedstock also enables a more diverse range of downstream products, putting Kuwait at a competitive advantage against ethane-dependent producers in Qatar and Saudi Arabia. On the downside, the government's domination of upstream and downstream sectors stifles the investment climate within the country and ultimately diminishes the country's export potential as large investment is kept at bay and never fully realised.
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- Facilities belonging to Equate, which represents 60% of Kuwait's non-oil exports, are producing at above nameplate capacity, which indicates that the company is enjoying considerable commercial success on global markets. The situation has prompted Equate to invest in debottlenecking its 825,000 tonnes per annum (tpa) high-density polyethylene/linear low-density polyethylene 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.
- Karo is looking to develop its production facilities and improve the performance and flexibility of its aromatics complex and PIC is examining the viability of more aromatics plants, although further development is unlikely before 2018.
- Although investment is ongoing, the timescale for Kuwait Petroleum Corporation's Olefins III project is set to slip to 2017, which could add USD4bn to the total cost and potentially lead to scaling back of planned capacities. 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 polyethylene (PE) and up to 600,000tpa ethylene glycol. 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.
- Kuwait's petrochemicals rating is 60.8 points this quarter, unchanged since the previous quarter due to a modest rise in its country risk score. However, it has risen from fourth to third place with Qatar in our regional Risk/Reward Ratings ranking for the Middle East and North Africa as a result of a 0.5 points decline in Qatar's score. It now lies 1.8 points ahead of Iran and 5.9 points behind the UAE.
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