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.