Qapco targets $12bln investment

March 29 (Peninsula) -- Qatar hopes to soon become the regional hub of petrochemical industry and plans are afoot to raise production from the current 18 million tonnes a year to 30 million tonnes by 2014.

This has been disclosed by Dr Mohamed Al Mullah, General Manager of Qatar Petrochemical Company (Qapco), in an interview with Qatar News Agency (QNA). He added that investments in Qapco currently total $1.7bln and are expected to jump to an incredible $12bln by 2012. Given a booming petrochemical industry in the Middle East, Qatar will become an important regional hub, Al Mullah noted, explaining that Qapco was producing 800,000 tonnes of ethylene annually and 400,000 tonnes of low density polyethylene (LDPE), besides 70,000 tonnes of sulphur.

The company has been meeting a considerable part of Middle East requirements of ethylene whose plant is being upgraded. Expansions underway would allow Qapco to raise LDPE output to 700,000 tonnes annually by 2011 while production of ethylene would reach 1.4 million tonnes per annum, Al Mullah said. The company's products have become more competitive in the European Union (EU) countries thanks to a reduction in EU taxation rates to 3.5 percent following coordinated efforts by Qatarand other GCC countries.

Qapco currently has a global marketing network with 26 offices and three regional storage facilities extending the company's services to many countries around the world, especially in the Middle East and Asia. Al Mullah said that Qatar is becoming one of the major producers of petrochemicals in the region, besides Saudi Arabia, other GCC countries and Iran. Iraq is expected re-enter into the field when it rebuilds its oil industry that had been ravaged by years of war, said Al Mullah. Global petrochemical prices have recently improved, the Qapco general manager added, anticipating good profits for the company. He said an upswing in prices in the near future was expected, given the current stability in crude oil prices.

Al Mullah said that the world financial crisis adversely impacted oil prices and in turn the prices of petrochemical products as well. However, the impact on Qapco profits was limited, given the boom in the industry in the pre-crisis period. The impact of the crisis was also cushioned by the fact that the primary feedstock for ethylene production, that is, gas, is produced in Qatar and available at reasonable prices, besides the presence of Qapco's marketing network in many parts of the world, though the global petrochemical industry had been seriously hit by the crisis, leading to plant closures and a decline in consumption. This has left producers with lower profits.

However, despite the crisis, Qapco's thrust continues to be on expansion. The company has signed an agreement to set up an LDPE plant at a cost of QR2bn. It will be completed by 2011 and produce 300,000 tonnes of LDPE per annum. Besides, Qatofin , a Qapco subsidiary which has a production capacity of 450,000 tonnes a year, had started LDPE production in November 2009, Al Mullah noted. Qatofin represents Qapco's competitive edge in global markets. It is 36 percent owned by Qapco, 36 percent by France's Total and one percent by Qatar Petroleum.

MRC

PP prices in Russia continue to increase

MOSCOW (MRC) - To the end of March prices on PP on Russian market have broken another record and reached the level of 53.000 - 58.000 RUB/mt - this information was stated in MRC weekly Price report.

Insufficient supply on the market, seasonal demand increase and upcoming suspenses for scheduled maintenance in Kapotnia and Ufa - all those factors cause the future PP prices increase in Russia. Some Russian producers have already made the prices on PP for shipping in April public.

Moulded PP got more expensive to April to 56.000 - 58.000 RUB/mt, including VAT, FCA, at the same time demand of the material on the market is still limited. The prices on raffia have essentially increased. It is expected, that all the Russian producers will define the prices for April before the end of this week.

European producers also intend to increase the prices on PP in April on EUR 50-70/mt. Limited supply of the polymer on European market continues to have an influence on price increase. Besides, some producers from Eastern Europe have stated about necessity of suspense for scheduled maintenance in April. That will make the deficit in region stronger. In Asia the prices continue to decrease as a result of polypropylene surplus in the region, some producers are planning to lower the capacities charging to decrease polymer supply on the market.

MRC

More information about PP market in Russia is presented in our Price reports.

PetroChina plans $60 bln of overseas expansion

March 29 (Bloomberg) -- PetroChina Co. plans to spend at least $60 billion in the next decade on overseas acquisitions, challenging Exxon Mobil Corp. and BP Plc in the race to control oil and gas fields.

⌠Ten years ago, PetroChina was a state-owned oil company, but now we have a goal of becoming an international, integrated energy company, Jiang Jiemin, chairman of the world's largest company by market value, said in a March 25 interview, where he announced the investment plan.

Beijing-based PetroChina spent almost $7 billion in the last year to buy refineries and reserves in Australia, Canada, Singapore and Central Asia. The expansion pits PetroChina against Irving, Texas-based Exxon, which agreed to pay about $30 billion for U.S. gas producer XTO Energy Inc. in December.

⌠Every five, 10 years or so, you'll get the occasional $30 billion deal, but this is at least $6 billion every year and that's significant for any major oil company, said Neil Beveridge, an analyst at Sanford C. Bernstein Ltd. in Hong Kong. ⌠This puts PetroChina on par or exceeding some international oil majors in spending.

Exxon is counting on gas to provide the bulk of its future growth with the acquisition of XTO Energy as well as new developments from the South Pacific to the Celtic Sea. BP, vying with Royal Dutch Shell Plc as Europe's biggest oil company, paid at least $8.3 billion to acquire assets over the past 12 months. PetroChina teamed up with Shell last week to buy Australian gas producer Arrow Energy Ltd. for $3.2 billion.

MRC

PP consumption in Ukraine increased on 53%

Moscow (MRC) - In January - February 2010 the calculated polypropylene (PP) consumption in Ukraine increased on 53% in comparing with similar period in 2009, and forms 16,400 tons - this information was stated in MRC Monthly report.

In February low level of purchase activity was observed on the domestic market, caused by low demand on complete products and lack of sufficient circulating assets. In spite of essential export ships (6740 tons), PE supply on Ukrainian market was sufficient.


Calculated PP-homo consumption in February decreased on 47% in comparing with January. Import supplies of homopolymer of propylene were reduced on 11%. The most essential reduction touched Russian materials supply (-36%), which was caused by reduction of export programs by some Russian producers.

Import supplies for sheet extrusion sector have decreased on 17%. Reanimation of material supplies into this sector should be expected in April, which is caused by seasonal purchase activity increase in disposable dishes production sector.

MRC

More information about PP market is present in company's Monthly reports.

China Sinopec's 2009 profit more than doubled

March 29 (AP) -- Sinopec, Asia's biggest refiner by volume, said profit more than doubled in 2009 on lower crude oil costs and a revival in demand amid China's stimulus-fueled recovery.


Sinopec, also known as China Petroleum & Chemical Corp., said profit for 2009 rose to 61.3 billion yuan ($8.97 billion) or 0.7 yuan (10 cents) a share. Its profit in 2008 was 28.4 billion yuan.


The company has benefited from the government's decision to ease controls that battered Sinopec in previous years by preventing it from passing on record crude costs to consumers. Beijing raised state-set prices of gasoline and diesel several times last year to reflect higher global oil costs.


Sinopec said it paid an average of $61.50 per barrel for crude oil last year, down 36.6 percent from the year before.


But lower prices also took a bite out of Sinopec's revenue, which fell 10 percent to 1.35 trillion yuan ($197.7 billion) from 1.5 trillion yuan the year before.

MRC