Oman petrochemicals to benefit as Mideast hosts world events

By Muhamad Fadhil

MUSCAT (ICIS)–Oman’s petrochemical industry is expected to significantly grow in the years leading to major world events that will be hosted in the Middle East, market players said on Tuesday.

The World Expo – a trade exhibition – will be held in Dubai, UAE in 2020, while the FIFA World Cup – a sporting event – will be hosted by Qatar in 2022.

Construction activities for these major events are expected to kick off soon, boding well for the petrochemical sector in the region.

“Oman is often forgotten when we talk about petrochemical growth in this region. But, [the country] will be one to watch. I expect significant growth from Oman leading up to the World Expo and World Cup,” a major Middle East polymer trader said at the Oman Plast in Muscat.

Oman Plast is a three-day regional conference on plastics and rubber industries that will run from 11-13 February.

In preparation for the expected spike in demand, Oman has ongoing major projects that will boost its petrochemicals capacity.

As of end-2012, Oman – which is part of the six-member Gulf Cooperation Council (GCC) – has a petrochemicals capacity of 9.5m tonnes, according to the Gulf Petrochemicals and Chemicals Association (GPCA).

Oman Refineries and Petroleum Industries Co (Orpic) is currently working on the front-end engineering design (FEED) of its $3.6bn integrated plastics project in Sohar that is due to be completed in 2018.

The project comprises a 800,000 tonne/year steam cracker that will use a mix of feeds, including condensates and liquefied petroleum gas (LPG); a 838,000 tonne/year linear low density polyethylene (LLDPE)/high density PE (HDPE) swing plant; a 215,000 tonne/year polypropylene (PP) plant; and a 46,000 tonne/year benzene unit.

Moreover, Oman Oil Co (OCC) is looking at building a refinery and petrochemical complex  in the port town of Duqm, in  joint venture with the International Petroleum Investment Co (IPIC) of Abu Dhabi.

In the first phase of the project, a 230,000 bbl/day refinery will be completed and commissioned in 2017. The second phase will see the development of a petrochemical complex, although no timeline was fixed for the downstream plants.

“These projects in Oman will be key to support [the] overall growth in petchem capacity in the whole of GCC,” according to a key plastic processor based in the UAE.

The GCC comprises Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE.

The other members of the GCC are also beefing up their petrochemical capacities, anticipating strong opportunities  for growth to open up in the coming years.

“Oman faces competition from the rest of the GCC region as well. Other GCC countries are expanding their capacity to meet [increased] demand. The two major events will provide an added impetus for everyone in the region. Everyone will need to up their game,” according to source close to an Omani producer.

In the UAE, Borouge is planning to start up its new cracker in Abu Dhabi this year. Called Borouge 3, the third phase of the  company’s petrochemical expansion is expected to raise its olefins and polyolefins capacity by 2.5m tonnes/year.

In Saudi Arabia, meanwhile, Sadara Chemical is on track to bring its 1.5m tonne/year mixed feed cracker in Jubail on stream in 2015.

Sadara is a joint venture between Dow Chemical and Saudi Aramco. Its petrochemical complex in Jubail will consist of 26 world-scale manufacturing units and will be the first in the Middle East to use refinery liquids as feedstock.

“The timing of these new projects could not be better. They will be well placed to meet the surge in petchem demand from now to 2020,” according to a GCC-based petrochemical end-user.

The GPCA estimated the GCC region will add 54m tonnes to its 2012 annual chemicals production capacity over a five-year period to 183.6m tonnes, with the average growth pegged at 7.3%  per year.