QAPCO Polyethylene Plant Mesaieed Industrial City, Qatar

The Qatar Petrochemicals Company (QAPCO), a majority-owned subsidiary of Qatar Petroleum (QP) established in 1974, is to construct a low-density polyethylene (LDPE) plant in the Mesaieed Industrial City near Doha in Qatar. With the world price of oil just balancing at an all-time high and the price of commodities and materials going up and up, it would seem to be a good investment.

The new plant will make use of natural gas feedstock obtained from the Ras Laffan Industrial complex (the QAPCO ethylene expansion project) and other sources as they become available from Qatar Petroleum.

QAPCO is currently 80% owned by Industrial Qatar (IQ) and 20% owned by Total Petrochemicals of France. IQ is 70% controlled and owned by QP, the balance is public.

The company markets LDPE raw material under the 'lotrene' brand name and exports the product worldwide to over 74 countries, in the Middle East, Asia, Australia and Africa. QAPCO hopes to expand its presence in the Asian market.

CONTRACT

In November 2007 Uhde, a German company and part of the Thyssen Krupp Group, was awarded the front-end engineering and design (FEED) contract for the new polyethylene facility at Mesaieed. The new plant will produce around 250,000tpa of low-density polyethylene, with the possibility of it being expanded to around 300,000tpa capacity in a later phase of construction.

The FEED contract is expected to be completed by mid-2008 and the tender process for the engineering, procurement and construction contract will start before the end of 2008. Construction will be expected to start in early 2009 and be completed by the end of 2010, with commercial production starting in the first quarter of 2011.

The facility will licence technology for the polyethylene production from Lyondell Basell Industries of the Netherlands, which will license its Lupotech polyethylene production technology. Because of restrictions on the licensed technology, the EPC contract will likely only be bid for by a limited number of contractors, including Uhde of Germany, Technimont of Italy and Simon Carves of the UK.

INFRASTRUCTURE SUPPORT

The Qatofin polyethylene plant, which will come into service during 2008, is situated adjacent to the existing two QAPCO polyethylene plants at Mesaieed, each with a capacity of 350,000tpa. The new QAPCO plant will be constructed adjacent to these other three facilities and will be able to share infrastructure.

The feedstock of gas for the new QAPCO plant will come in part from the ethylene cracker developed at Ras Laffan in a joint project between Qatar Petroleum, Chevron Phillips Chemical Company LLC, QAPCO and Total Petrochemicals France.

This cracker is just being completed by Technip and is due to come into operation in late 2008.

Feedstock will also come from the QAPCO ethylene cracker expansion at Mesaieed with a capacity of 720,000tpa; a parallel train added an additional 200,000tpa capacity at a cost of $230m.