InterviewAPIC '12: Global urea demand seen growing 2-3% annually

18 May 2012 07:31  [Source: ICIS news]

By Nurluqman Suratman

KUALA LUMPUR (ICIS)--Global urea demand totalled 154m tonnes in 2011 and is expected to grow by 2-3% annually in the next few years, buoyed partly by steady consumption from Asia through to 2020, Petronas Chemicals Group (PCG) CEO Abd Hapiz bin Abdullah said on Friday.

PCG aims to meet this demand growth in Asia, especially its primary export market southeast Asia, through its latest Malaysian ringgit (M$) 4.5bn ($1.43bn) Sabah Ammonia Urea (SAMUR) project at Sipitang in Sabah, Malaysia, which broke ground in February this year, Abd Hapiz told ICIS.

Abd Hapiz was speaking at the sidelines of the Asia Petrochemical Industry Conference (APIC) in Kuala Lumpur, Malaysia.

The SAMUR project, which is expected to begin operations in 2015, consists of a urea plant, a granulation plant and an ammonia plant, as well as utilities and jetty facilities.

The urea plant will produce 1.2m tonnes/year of granulated urea, while the ammonia plant will produce 740,000tonnes/year of liquid ammonia.

The SAMUR project will potentially position PCG as the second largest urea producer in southeat Asia, according to Abd Hapiz.

Currently, PCG operates two urea plants - a 750,000 tonnes/year urea plant in Bintulu, Sarawak and a 683,000 tonnes/year urea plant in Gurun, Kedah.

Apart from the SAMUR project, PCG is not looking to expand its fertiliser capacities at the moment, Abd Hapiz said.

"SAMUR alone is a very big project for us to undertake... [but] we are always keeping an eye on how things develop and should any opportunity arises yes we will probably consider that [expansions] going forward," he said.

Meanwhile, demand for specialty chemicals in southeast Asia is also expected to be strong in the next five years, Abd Hapiz said.

"This [specialty chemicals] market is not very big in the Asia-Pacific yet so when we endeavoured into these specialty markets we be believe the growth opportunities will be there," he said.

PCG and BASG are currently doing a feasibility study on a possible expansion of their propylene (C3) value chain in Kuantan, via building a new plant for superabsorbent polymers.

They are also looking at expanding the capacity of their existing glacial acrylic acid unit.

PCG's move into the specialty markets will help to balance out the cyclical nature of commodity products, Abd Hapiz said.

"If you look at our product portfolio we have a lot of commodity-type products and when you have that you are exposed to cyclical markets," he said, adding that having a diversified product range which includes specialty chemicals is the company's intent to balance fluctuations in the market. 

"When you go into products such as specialties the chances of you being exposed to these fluctuations will be less," Abd Hapiz added.

The APIC runs on 17-18 May.

($1 = M$3.14)



By: Nurluqman Suratman



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