2008-10-21 15:44:47 - Report Buyer, the online destination for business intelligence for major industry sectors, has added a new report offering an in-depth analysis of Qatar's petrochemicals industry.

The report 'Qatar Petrochemicals Report Q4 2008', available at www.reportbuyer.com/go/BMI02817 highlights how financial results for Qatari firms in the petrochemicals sector demonstrate how the country is able to leverage its competitive edge to boost margins, while competitors struggle with the impact of rising crude prices.

In H108, Industries Qatar (IQ) more than doubled its net profits over

the same period in 2007, rising to QAR4.6bn (US$1.26bn) from QAR2.0bn, due to improved petrochemical margins. Profit margins at petrochemical subsidiary Qatar Petrochemical Company (Qapco) rose by over 100% to QAR1.58bn. In 2008, Qapco is targeting sales of 315,000 tonnes of ethylene, 400,000 tonnes of LDPE, 37,000 tonnes of LPG, 29,000 tonnes of py-gas and 62,000 tonnes of sulphur. By the year-end, capacity is set to reach 720,000 tonnes of ethylene and 404,000 tonnes of LDPE. Qatar Fertilisers Company (Qafco), another IQ subsidiary, reported a 93% rise in H108 profits to QAR1.72bn. Qafco is expected to sell 425,000 tonnes of ammonia and 2.97mn tonnes of urea this year, while its production capacity has been estimated at 2.09mn tonnes and 2.92mn tonnes respectively, says the report.

The petrochemical sector is set to expand further, with Q109 set to see the awarding of a US$1bn lumpsum turnkey contract to construct a mixed feed 900,000tpa ethylene cracker at Mesaieed, which will be a 70:30 joint venture (JV) between Qatar Petroleum (QP) subsidiary Qatar Intermediate Holdings and Honam Petrochemical. The complex is likely to overshoot its originally scheduled deadline of 2011, and costs are set to rise well above the original estimate of US$2.6bn. Moreover, authors note that 75% of the feed will come from locally sourced oil-derived naphtha, which could erode the competitive edge Qatar has built up as a result of access to natural gas-derived ethane feedstock if crude prices stay high.
Despite the rising cost of construction in Qatar, the country continues to attract interest from investors due to the availability of cheap feedstock. For instance, in July 2008 Reliance Industries and GAIL India proposed a US$1.3bn petrochemical complex in Qatar.

Qatar remains in second place in BMIs petrochemical rankings for Middle East and Africa with 62.9 points. This puts it 3.2 points ahead of the UAE and 10.8 points behind Saudi Arabia. It is also 7.5 points ahead of the regional average of 55.4 points. Qatar is making solid progress in raising its petrochemical capacity. Qatars petrochemical-specific ratings are strong, with cracker capacity set to more than treble over the next five years and the country hosting the second largest polyolefins production capacity in the Gulf Co-operation Council (GCC) after Saudi Arabia.

'Qatar Petrochemicals Report Q4 2008' is available from Report Buyer. For further information, please go to:
www.reportbuyer.com/energy_utilities/country_overviews_energy_ut ..

Report Buyer product ID: BMI02817

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