Polyethylene In The Sand

Late last month, with a flourish, the Qatari Heir Apparent Tamim Bin Hamad Al-Thani laid the foundation stone for a polyethylene plant that is the first part of a $1.2 billion project to produce olefins and polyolefins in Qatar.

The official ceremony set off the construction of a linear low-density polyethylene plant by Qatofin, a joint venture between Qatar Petrochemical (Qapco, 63%), Total Petrochemicals (36%), and Qatar Petroleum (1%). The plant will process about 422,000 metric tons of ethylene and 38,000 metric tons of butane per year to produce 450,000 metric tons of polyethylene. Scheduled to be completed in the fourth quarter of 2008, the plant will help secure Qatar's aim of being one of the world's leading producers of polyethylene.

In a keynote address at the ceremony, Minister of Energy & Industry Abdullah Bin Hamad Al-Attiyah said the project both serves the interests of existing investors in Qatar and has industrial synergies with other petrochemical ventures at Mesaieed, south of Qatar's capital city, Doha. The petrochemical developments are, in turn, part of a drive by the country to develop its vast natural gas reserves.

The other major part of the project is what will be one of the world's largest ethane crackers, at Ras Laffan Industrial City, north of Doha. The cracker will have ethylene capacity of 1.3 million metric tons per year, with potential for expansion to 1.6 million metric tons. The cracker will be owned by Ras Laffan Olefins Co., a joint venture between Qatofin, Qatar Chemical Co. (Q-Chem), and Qatar Petroleum; its feedstock will be natural gas produced in Qatar by Total.

Ethylene from the cracker will be shipped by pipeline from Ras Laffan to Qapco's existing polyolefins complex at Mesaieed. The pipeline will also supply the Q-Chem complex at Mesaieed, a factor that points up the interplay between a variety of Western companies and Qatari firms.

Q-Chem, a joint venture between Qatar Petroleum and Chevron Phillips Chemical, opened at Mesaieed in 2003; it produces ethylene, polyethylene, and the polyethylene comonomer 1-hexene. Its next project, Q-Chem II, which will produce linear low-density polyethylene and α-olefins, is scheduled for start-up in 2008. The stake in Q-Chem also brings Chevron Phillips a share in the Ras Laffan cracker.

Moreover, both ExxonMobil Chemical and Shell Chemicals have announced that they are exploring the construction of ethylene crackers and derivatives units at Ras Laffan.

François Cornélis, president of Total Chemicals, pointed out that in 1999 the Middle East was able to make 6 million metric tons of ethylene, 6% of world capacity. Now total ethylene capacity in the region is expected to climb to 33 million metric tons in 2013, 17% of projected world capacity.

"Qatar has made a tremendous effort to take part in this growth with the valorization of its gas," Cornélis said. "Total is raising its stake in Qatar as a country with these investments." In fact, he said, by 2010 his company will have 19% of its petrochemical capacity in the Middle East, up from 14% currently. Its proportion in North America will slip slightly over the five years, to 24% in 2010 from 25% today, while the share represented by Europe will decline to 57% from 61% currently.

In addition to its direct stake in Qatofin, Total Petrochemicals also holds a 20% share in Qapco; government-affiliated Industries Qatar owns the remainder. Qapco, formed in 1974, began production in 1980 as a vehicle for using the ethane gas produced as a by-product from the country's petroleum operations.

Qapco is already a sizable polyethylene player, said its general manager, Hamad Rashid Al-Mohannadi. It operates one ethylene cracker with 720,000 metric tons of annual capacity and runs two low-density polyethylene plants, producing a total of about 400,000 metric tons per year. A third low-density plant with annual capacity of 250,000 metric tons is being planned for 2010 or 2011.

Qapco is awaiting approval, with guarantees for ethylene supply, to proceed with plans for facilities making the polyvinyl chloride precursors ethylene dichloride and vinyl chloride.

Qapco is also keeping a close eye on the joint project between Total Petrochemicals and engineering company UOP to develop a process for making olefins from methane-derived methanol. According to Jean-Bernard Lartigue, president of Total Petrochemicals, "We want to fully pilot this methanol technology for three years. We will start in early 2007 in Feluy, Belgium, so the earliest we could use this technology commercially is 2010. We could ship the methanol or the finished products made from it."

"This is very interesting technology," Al-Mohannadi observed. "With the methanol, we could do all sorts of things. Our natural gas contains only 4% ethane, and the rest is methane. But we will wait until the technology is fully proved. We are waiting for what Total will be going through for the next three years," he said. "We will be right there."