Mesaieed (Qatar Vinyl), Qatar
An integrated petrochemical plant has been built in Mesaieed, about 48km south of Doha in Qatar on the Persian Gulf. It is sited next to the QAPCO petrochemical complex so as to receive ethylene from that plant, as well as utilising economies of scale. The site will also allow the new plant to use an existing QAPCO jetty.
INTEGRATED PETROCHEMICALS PLANT
The project was initiated in December 1998, and started production on 20th June 2001. There were a number of stages in the construction and technology process. The agreement of the financing, the signing of the engineering, procurement and construction (EPC) contract, and the commencement of construction all began in December 1998. Commissioning will began in 2000 and the plant was integrated with the QAPCO plant in October 2000.
The EPC contract, which is estimated to be worth $340 million, was awarded to Krupp Uhde and Technip Italia Spa. Their contract is estimated to be worth about $430 million. In a contract worth $8 million, part of the construction will be carried out for Krupp by Contrack International. Consolidated Contractors International Company (CCC) is a second major subcontractor.
Power for the whole process is supplied by a 110MW unit, which is already part of the QAPCO plant. Salt is imported from outside the plant to feed the chlorine unit. This is broken down into chlorine (260,000t/yr capacity), caustic soda (295,000t/yr capacity) and hydrogen. The hydrogen is used as a fuel gas. The chlorine is fed into the ethylene dichloride (EDC) unit, along with ethlyene from the QAPCO plant (capacity of 106,000t/yr). The EDC unit produces 175,000t/yr for sales, as well as 193,000t/yr of EDC for the vinyl chloride monomer (VCM) unit. This EDC is fed in with 52,000t/yr of ethylene (again from the QAPCO facility) as well as 5,000t/yr of caustic soda. This produces 230,000t/yr of VCM for sale. The remaining 290,000t/yr of caustic soda is sold.
Initially, the salt was supplied from abroad. However the Qatari government issued a permit to erect a new solar salt facility within the country, and the Mesaieed plant is now its main customer. Other products are also expected to allow the local economy to benefit from the plant's presence through a multiplier effect.
Thus, the volume split of the plant's production is 33% VCM, 25% EDC and 42% caustic soda. QVC expects this to split down in revenue terms as 50% VCM, 23% EDC and 27% caustic soda.
The QVC project stood under threat from an early stage because of the viability questions raised by low oil prices. The main advantage to petrochemicals plants in the Middle East is easy access to cheap feedstock. This compensates for the higher transport costs to Asia and Europe. The project was threatened since producers all over the world benefited from low oil prices, whilst Middle East producers still had high transport costs.
The project is underpinned by a $475 million loan from a number of banks. The lead bank was the French BNP Paribas, which has long experience of Qatari business. Underwriters are Credit Suisse First Boston (CSFB) and Arab Petroleum Investment Corp (Apricorp).
The main target markets for QVC are South East Asia, Korea, China, India and Australia. The marketing agents are Elf Atochem, Norsk Hydro and QAPCO. QAPCO's involvement has helped guarantee feedstock for the plant at reasonable prices.
The overarching aim of the project, along with the numerous other Qatari hydrocarbon and related schemes currently underway, is to move Qatari industry to the more value-added part of the petrochemical spectrum. This makes it less vulnerable to overcapacity and price falls.
THE QATAR VINYL COMPANY
The Qatar Vinyl Company (QVC) was formed in 1997 to create the project. It is a subsidiary of four companies. The Qatar Petrochemical Company (QAPCO) is the biggest shareholder, with 31.9%. Norsk Hydro is next with a 29.7% share. Elf Atochem has 12.9%. Qatar General Petroleum Corporation (QGPC) has 25.5%. QGPC is 80% owned by QAPCO, with 10% owned by Elf Atochem and Enichem respectively.