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Kazakhstan and Uzbekistan Petrochemicals Report 2012
Business Monitor International, Dec 2011, Pages: 45
Kazakhstan's vast oil and gas resources reflect latent potential for rapid and significant expansion of petrochemicals facilities over the medium to long term, while Uzbekistan hopes to maximise the value of its gas potential through increased supply to the petrochemicals segment, according to BMI's latest Kazakhstan and Central Asia Petrochemicals Report.
The development of Kazakhstan's petrochemical industry is likely to come through a mixture of worldscale greenfield developments as well as the rehabilitation and modernisation of existing facilities.
However, progress was underway in 2011 with LG Chem appointed to build KPI's ethane-fed petrochemicals complex in Atyrau with capacities of 840,000tpa ethylene and 800,000tpa PE. It is now expected to start production in 2016 and is a revision from 1mn tpa ethylene and 400,000tpa PE. The site will also feature a propane dehydrogenation unit with 500,000tpa of propylene capacity and a 500,000tpa PP unit as well as an aromatics project with 133,000tpa benzene and 496,000tpa paraxylene.
At the same time, Kazakhstan's domestic market is set to accelerate due to rapid industrialisation and growth in consumer demand. Under the optimistic demand forecast for PE and PP in Kazakhstan by 2016, the per capita consumption is expected to exceed the average world level, and by 2020 the figures could reach the level in developed countries. However, slow rates of growth over the decade could see the country fall short of its plastics consumption targets. This may mean that domestic petrochemicals producers will be forced to export a higher level of output than they had intended.
Uzbekistan has substantial resources, but inadequate conditions for investment. A more gradual expansion of existing capacity is likely in this country and plans have been delayed. Currently, Uzbekistan is planning a gas-fed complex at Akchalak, a JV between Uzbekneftegas and Korea Gas Corporation. The Uzbekistan complex would be fully integrated and include natural gas lifting and separation facilities, an ethane cracker designed to produce 400,000tpa of ethylene and downstream units with capacity for 380,000tpa HDPE and 80,000tpa PP. Uzbekistan is also to host a PVC plant with 50,000tpa capacity, which BMI believes should be completed by 2015, if it starts construction in 2012.
Although Uzbekistan's planned petrochemicals production is likely to be smaller than Kazakhstan's, BMI believes it will be more dependent on exports with the economy expanding at a slower rate and with a smaller market relative to Kazakhstan.
Our assumptions are that the combined Kazakh and Uzbek ethylene capacity is expected to expand from 240,000tpa in 2011 to 1.49mn tpa by 2016 with the completion of the KPI complex and the Uzbekneftegas-led JV. Polymer capacity in the region is set to rise from 465,000tpa to 2.58mn tpa largely as a result of the development of these two complexes.
Business Monitor International's Kazakhstan and Uzbekistan Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kazakhstan and Uzbekistan's petrochemicals industry.
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