What Andrew Liveris didn’t address when interviewed over the Dow/PIC deal is what the $19bn olefins and polymers deal could mean for Asia, the Middle East and commodities.
All the talk was of specialities with speculation sure to be rife over the next few months over how the US major will use its now substantial war chest to boost its presence in performance products.
But when it comes to commodites, Kuwait is not blessed with abundant supplies of natural gas.
Although the Equate joint venture (the jv between Dow and PIC) has sufficient gas to build and supply a second complex, which is due on stream next year, talk of a third cracker in Kuwait has gone quiet. There were reports late last year of a significant new gas find in the north of the country, but apparently the new field is not ethane-rich.
And so if Dow/PIC can’t further expand in Kuwait, where might they build?
Perhaps in Egypt where discussions have been taking place with the Egyptian government for an ethane cracker.
And PIC, through its parent company Kuwait Petroleum Co, has access to crude oul supplies. This could get Dow/PIC into China, where future foreign participation in future integrated refinery and petrochemical projects might only be possible if the foreign partner brings oil supply into the deal. This is a commodity of which China is in desperate shortage.
Dow has also been pursuing a coal-to-chemicals project in China. Will its interest in coal-to-chemicals persist now that it is better able to build oil-based petrochemicals in the world’s most-important market?
Finally, though, it’s worth noting that there has been a lot of talk, and hints from those in the know, about further pipeline links across the Middle East.
On of the places with lots of gas in the region (excluding Iran, which has too many other issues to worry about than pursuing regional co-operation) is Qatar. Linking Kuwait into future spurs of the Dolphin pipeline might not be beyond the realms of possiblity – thereby, making Kuwait a place for further expansion.
Or what about moving gas from Iraq, if that country ever becomes politically stable enough? Or maybe even Dow/PIC could co-operate on eventually even building a cracker together in Iraq?
Worth ringing Mr Liveris and asking him these questions. I will ask my colleagues to help out.