12 January 2010 16:43 [Source: ICIS news]
By Will Beacham
As the Emir of Qatar lowered a large pearl onto the ceremonial plinth, the next chapter in Total Petrochemical’s ambitious ?xml:namespace>
Journalists and local dignitaries mingled with groups of Total and Qatofin executives at the ostentatious opening ceremony last November in Mesaieed, southern Qatar, for the inauguration of Qatofin’s new 450,000 tonne/year linear low density polyethylene (LLDPE) plant.
During the same trip, just a day earlier, we had climbed, breathless, to the top of 60 metre tall furnaces at the 1.3m tonne/year Ras Laffan cracker, which our Total hosts revealed, would be starting test runs by January 2010. From there we could see various ethane and liquefied natural gas (LNG) installations feeding off the nearby North Field, as well as the Ras Laffan oil refinery.
A new ethylene pipeline links the two sites, and should send 422,000 tonnes/year of ethylene to be converted into 450,000 tonnes/year of LLDPE. By now, production from the new LLDPE plant may already be hitting Europe, Asia and the
Thus, through a myriad of joint-venture agreements, Total - with a keen eye on future feedstock availability and market dynamics - continues to grow its footprint in
The company’s global petrochemical strategy is logical and straightforward: invest where cheap and plentiful feedstocks exist and where market growth is likely to be most explosive.
As Graeme Burnett, senior vice president Middle East and Asia for Total Petrochemicals put it: “Long term,
He produced Total projections showing
Total plans for 3% annual worldwide polymer productions growth focused on the Middle East and Asia with the
“That pays for a lot of freight and logistics.This region will become the main global arbitrage point for polymers worldwide,” he added.
Like most major US and European energy and chemical groups, Total is desperate to increase its presence in and revenues from these high growth regions. Over the past few years it has taken several steps in this direction.
Total has been in
Apart from the Ras Laffan cracker, in which Total has a 22.2% stake, the company also has a 20% stake in QAPCO, the Qatar Petrochemical Company.
QAPCO operates a 800,000 tonne/year ethylene cracker and 410,000 low density polyethylene (LDPE) unit at Mesaieed in
Qatofin, which owns the new LLDPE plant at Mesaieed, is 63% owned by Qapco and 36% directly by Total.
Unfortunately for Total, it lost to Exxon Mobil in the race to secure
Earlier in January the US-based petrochemicals giant was revealed as the winning bidder to develop a 1.6m tonne/year mixed feed steam cracker, two 650,000 tonne/year gas phase polyethylene plants, and a 700,000 tonne/year ethylene glycol plant at Ras Laffan. Start-up is scheduled for the fourth quarter of 2015.
Beyond that, Total is hoping to bid for the next round of petrochemical developments in
A moratorium is due to end in 2014 on further gas extraction from the North Field which supplies Ras Laffan.
With this and other developments, Burnett said there should be enough feedstock for another cracker. Ras Laffan and Mesaieed are being considered as locations.
The fact that this next stage of the Ras Laffan project is mixed feed is indicative of the limitations of ethane as a feedstock.
Burnett said that in the long term the global balance of ethane as a cracker feedstock would only reach around 15% due to finite supplies of gas.
“From 2000-2015 Total’s balance will go from 90% naphtha to 55% naphtha, with the balance taken by liquefied petroleum gas (LPG) and ethane,” he said.
Elsewhere, in 2003 the group acquired
In Al Jubail in
Burnett said that after the law changed so that the majority share in a joint venture has to be owned by an Algerian company, Sonatrach, the state-controlled energy and chemical group, needs to renegotiate a previously signed deal with Total. Technical issues over feedstocks also had to be resolved.
According to the original deal, Total would have a 51% stake in the venture with the rest going to
“A feasibility study has been completed but it has proven difficult to move with a good pace," Burnett said, adding: “Total has worked in many countries with volatility so we are used to it. Because we believe in these projects, they come to fruition eventually.”
Burnett revealed the company is still looking for acquisitions and joint ventures in
And with all this low-cost product flowing around the world, Total has embarked on a plant closure plan for its 3rd and 4th quartile chemical plants, focused mainly on
Between 10-20% of overall European petrochemical capacity will close down over the next five years, Burnett reckoned, to be replaced by
“There are no more [Total] closures in the pipeline. We’ve taken some very hard decisions,” he added.
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