Boston, MA -- (SBWIRE) -- 02/19/2014 -- The Qatari petrochemicals industry is witnessing strong growth as capacity expands, even in the face of a global economic slowdown and threats of escalating feedstock costs. Continued growth demonstrates the confidence the Qatari industry has in future prospects, although BMI warns that planned diversification will not be sufficient to ensure the sector can reap the full benefits of expansion.

Qatar is planning two major additions to capacity at Ras Laffan: the Al-Karaana and Al-Sejeel petrochemicals complexes. These are set to stimulate further downstream development. Coming onstream in 2018, the Al-Sejeel Petrochemicals Complex will lead to the construction of an ethane-fed cracker with capacity of 1.6mn tpa ethylene and downstream units including 540,000tpa polypropylene, 550,000tpa linear low density polyethylene (LLDPE) and 1.04mn tpa high density polyethylene (HDPE). Due onstream in the same year, the Al-Karaana petrochemicals complex will also boost finished petrochemicals capacities by over 2mn tpa. The complex, on its commissioning, will be capable of processing 1.1mntpa of ethylene, 170,000tpa of propylene, 1.5mntpa of mono ethylene glycol (MEG), 300,000tpa of linear alpha olefin (LAO) and 250,000tpa of oxo alcohols (OXO).

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Before these two mega complexes come online, Qatar Petrochemical Company (QAPCO) is planning to build a new plant, EP3, providing 400,000tpa of additional ethylene by 2016. This will raise capacity at the site from 800,000tpa to 1.2mn tpa. Meanwhile, Qatar Petroleum is planning the development of an integrated butadiene and elastomer complex in Ras Laffan with two Japanese partners, to come on stream in 2018. Capacities are likely to be announced after the completion of a feasibility study.

BMI notes the following developments in Qatar's petrochemical industry:

- BMI forecasts that by 2018, Qatar's ethylene capacity should reach 7.4mn tpa, more than treble the country's capacity in 2013. This will be accompanied by polyethylene capacity of 4.49mntpa (up 180%) and 540,000tpa of polypropylene (PP).
- Over the next decade, Qatar plans to spend US$25bn on expanding its domestic petrochemical industry. It also intends to more than double its annual petrochemical production capacity - from 9.2mn tonnes to 23mn tonnes - by 2020.
- Qatar has risen from fourth to third place in petrochemicals rankings for the Middle East and Africa with an overall score of 61.3, up 0.9 points since the previous quarter. This puts it 0.5 point ahead of Kuwait and 5.8 points behind the UAE. A mixture of improved country risk and planned growth in petrochemicals capacity has helped to lift Qatar's score.

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