Crackers to Be Built in Mideast

PETROCHEMICALS

Three petrochemical partnerships that were announced last week link Shell Chemicals, Basell, and Dow Chemical with local companies in the Persian Gulf region.

Shell is teaming up with Qatar Petroleum to develop a world-scale ethane-based cracker and derivatives complex in Qatar's Ras Laffan Industrial City. No details were announced about the project, other than that it is expected to start up early in the next decade, but consultants say that "world-scale" these days means about 1 million metric tons per year of cracking capacity.

Shell says the project is targeted mainly at the Asian market. According to Abdullah bin Hamad al-Attiyah, Qatar's minister of energy and industry, "The project clearly provides Qatar with another viable alternative to optimize the use of the country's natural gas resources." The cracker will accompany another deal between Shell and government-owned Qatar Petroleum: a large-scale liquefied natural gas project in Ras Laffan, expected to begin operations about 2010-12.

Farther up the Persian Gulf coastline, Basell has signed an agreement with a set of Saudi Arabian investors, led by the privately held Saudi firm Tasnee Petrochemicals, to build an integrated polyethylene complex at Al-Jubail Industrial City in Saudi Arabia.

This complex, to be 25% owned by Basell, will include an ethane cracker and two 400,000-metric-ton polyethylene plants. One plant will produce high-density polyethylene, and the other, low-density polyethylene. Both plants will employ Basell technology. Basell is the largest polyethylene producer in Europe, and CEO Volker Trautz says the project is part of the firm's strategy of expanding its geographic presence.

The two partners already have a joint venture, Saudi Polyolefins, producing 450,000 metric tons per year of polypropylene. And last year, Basell said it would build a similar-sized polypropylene plant and propane dehydrogenation unit in Saudi Arabia with Sahara Petrochemical, one of the shareholders in the new project.

Meanwhile, as those two new projects were announced, Dow and Kuwaiti partner Petrochemical Industries Co. (PIC) held a groundbreaking ceremony for their new ethylene and derivatives complex in Shuaiba, Kuwait, called Olefins II.

The two companies already are partners through the joint venture Equate Petrochemical, which had been established between PIC and Union Carbide prior to Carbide's acquisition by Dow.

Olefins II is planned to have an 850,000-metric-ton-per-year ethane cracker and a 600,000-metric-ton ethylene oxide/ethylene glycol plant. The existing venture's 600,000 metric tons of polyethylene capacity will be expanded to use the additional ethylene. Moreover, the two partners expect to build an ethylbenzene/styrene unit of 450,000 metric tons to be supplied with ethylene from Olefins II and with benzene from an aromatics project to be built at the same time on an adjacent site.