Boston, MA -- (SBWIRE) -- 12/25/2013 -- The Qatari petrochemicals industry is witnessing strong growth as capacity expands, even in the face of a global economic slowdown and threats of escalating feedstock costs. Continued growth demonstrates the confidence the Qatari industry has in future prospects, although BMI warns that planned diversification will not be sufficient to ensure the sector can reap the full benefits of expansion.

Qatar has managed to achieve solid growth in spite of a slowdown in global markets due to the recession in Europe and a decline in manufacturing growth in Asia. Low density polyethylene (LDPE) was boosted by Qatar Petrochemical Company's new LDPE 3 plant, which increased its polyolefin production capacity to 1.15mn tpa and made the site the world's biggest single producer of polyolefins.

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Upcoming projects include the development of a large petrochemicals complex in Ras Laffan by Qatar Petroleum and Qatar Petrochemical Company (QAPCO). An olefins project, valued at US$6.4bn, is also in development by QAPCO and Shell. QAPCO plans to expand the production capacity of its cracker, enabling it to produce up to 1mn tpa of ethylene. Other projects include Qapco's US$5.5bn JV with Total at Ras Laffan is set for completion in 2018. Also coming onstream in 2018, the Al-Sejeel Petrochemicals Complex, a joint venture between QP and QAPCO, and the Al-Karaana petrochemicals complex, a JV between Qatar Petroleum (QP) and Shell, which will together lead to a fuller diversification of Qatari petrochemicals production.

BMI notes the following developments in Qatar's petrochemical industry:

- BMI forecasts that by 2018, Qatar's ethylene capacity should reach 7.2mntpa, an increase of 177% compared to 2013. This will be accompanied by polyethylene capacity of 4.49mntpa (up 180%) and 540,000tpa of polypropylene (PP).
- Amid growth in Chinese and US supply and rising feedstock costs, by the end of our forecast period the Qatari petrochemicals industry may well be facing squeezed margins with the prospect that some plants will operate below capacity.
- Qatar is now ranked fourth in our petrochemicals rankings for the Middle East and Africa with an overall score of 60.4, unchanged since the previous quarter. This puts it 0.1 point behind Kuwait, 3.6 points behind the UAE and 1.7 points ahead of Iran

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