United Arab Emirates Petrochemicals Report Q1 2012
Business Monitor International, December 2011, Pages: 59
United Arab Emirates Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United Arab Emirates's petrochemicals industry.
The UAE is set to witness a further surge in petrochemicals capacities over the next five years as it becomes a major supplier to the Chinese market, according to BMI’s latest UAE Petrochemicals Report. The success of Abu Dhabi’s massive Borouge complex is confirmed in Borealis’ recently published financial results, which showed that the company made EUR98mn in net profits from the joint venture in Q311. The plant was therefore unaffected by the soft patch in European demand and the overall global market nervousness that led to a narrowing of polyolefins margins. Borouge’s strength, compared to the performance of European operations, underlines the growing importance of competitive Middle Eastern production for the balance sheets of majors. Even though the UAE’s petrochemicals sector is more dependent on less competitive naphtha feedstock than ethane-fed facilities in Qatar and Saudi Arabia, it has continued to thrive utilising its supplies.
The second phase of the Borouge complex at Ruwais, Abu Dhabi, began production in mid-2010 with a 540,000tpa PE unit coming onstream in July. In Q410, an olefins conversion unit producing 752,000tpa of propylene, together with 50,000tpa of propylene delivered from Adnoc’s refinery, began supplying the two Borstar PP units with combined capacity of 800,000tpa. Borouge 2 will triple Borouge’s polyolefins capacity to 2mn tpa when it becomes fully operational by mid-2011. An additional 2.5mn tpa is scheduled online in 2013, following the completion of Borouge 3. The new capacity will be marketed mainly to the Middle East and Asia Pacific, targeting high-end applications in the pipe and high performance packaging areas. Borouge 3 will have capacities of 1.43mn tpa PE and 960,000tpa PP supplied by a 1.5tpa ethane cracker, with US$4.6bn worth of construction contracts signed in Q210.
The Chemaweyaat project will include an olefins plant, an aromatics complex and a range of downstream polymer and chemical units and was due to start production in 2015, but BMI believes that it is more likely to start in 2016 due to delays. The first part of the development, Tacaamol, will use heavy naphtha feed for aromatics units and a lighter naphtha feed for a 1.5mn tpa mixed feed cracker. The second project, Al Chemeya, will use propane feedstock to produce propylene and derivatives. This is still in the pre-feasibility phase and joint venture partners are being sought. Tacaamol is expected to be the world’s largest fully integrated grass roots chemical complex with capacities, aside from the ethylene unit, including 690,000tpa propylene, 950,000tpa PE and 440,000tpa PP. In addition to PE, ethylene derivatives include 790,000tpa ethylene oxide, 900,000tpa MEG and 100,000tpa ethanolamines units.
There are unspecified ammonia, urea and melamine capacities planned. There will be an aromatics unit with 1.37mn tpa paraxylene in a single train and 860,000tpa of benzene as well as cumene, phenol, BPA and PC. As a result, by 2016 BMI expects ethylene capacity of 5mn tpa, up from 2mn tpa in 2011, with PE more than tripling to 3.52mn tpa and PP rising by nearly 170% to 2.15mn tpa over the period. In BMI’s Middle Eastern Petrochemicals Business Environment Ratings matrix, the UAE has a score of 65.0 points, up 1.8 points since the previous quarter due to an improvement in its long-term external risk score and the inclusion of the Chemaweyaat complex in our ethylene capacities. It has jostled with Kuwait for third place in recent months, but while the UAE has undergone massive expansion, Kuwait has suffered as a result of policy reversals in the refining and petrochemicals sectors, which has affected its market risk score, while its overall country risk rating has fallen in line with global economic trends.
This quarter it remains in second place, 1.5 points ahead of Qatar and 12.8 points behind the regional leader Saudi Arabia. Whether the UAE retains that position will depend on its ability to stay ahead of Qatar in country risk ratings, coupled with the further expansion of Borouge in 2013 and the proposed Chemaweyaat 1 set to bolster its petrochemicals capacities.
Executive Summary
SWOT Analysis
UAE Petrochemicals Industry SWOT
UAE Political SWOT
UAE Economic SWOT
UAE Business Environment SWOT
Global Petrochemicals Overview
Petrochemicals Market Overview
Table: World Ethylene Production By Country, 2011 And 2015 (‘000 tonnes capacity)
Financial Results
Table: Financial Results Of Major Petrochemicals Companies, 2010
Global Oil Products Price Outlook
Gulf Regional Overview
Table: Announced Ethylene Crackers In The Gulf Region
UAE Market Overview
Table: The UAE’s Petrochemicals Sector – Cracker Capacity, 2009-2016 (‘000 tpa)
Industry Trends And Developments
Dubai And The Northern Emirates
Overseas Investment
Developments In Related Industries
Table: Major UAE Oil And Gas Concessions
Plastic Conversion Industry
Business Environment
Petrochemicals Business Environment Ratings
Table: Middle East And Africa Petrochemicals Business Environment Ratings
Business Environment Outlook
Industry Forecast Scenario
Petrochemicals Outlook
Table: The UAE’s Petrochemicals Projects
Table: The UAE’s Petrochemicals Sector, 2008-2016 (‘000tpa, unless otherwise stated)
Macroeconomic Forecast
Table: United Arab Emirates – GDP By Expenditure, Current Prices Breakdown, 2008-2016
Company Profiles
Abu Dhabi Fertilizer Industries (Adfert)
Abu Dhabi National Oil Company (Adnoc)
Abu Dhabi Polymers (Borouge)
Glossary Of Terms
Table: Glossary Of Petrochemicals Terms
BMI Methodology
How We Generate Our Industry Forecasts
Chemicals And Petrochemicals Industry
Cross Checks
Business Environment Ratings
Table: Petrochemicals Business Environment Indicators And Rationale
Weighting
Table: Weighting Of Indicators
- Abu Dhabi Fertilizer Industries (Adfert)
- Abu Dhabi National Oil Company (Adnoc)
- Abu Dhabi Polymers (Borouge)
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