Kazakhstan and Uzbekistan are set to leverage their strength in oil and gas resources to develop a world class petrochemicals industry in Central Asia, according to a report by Business Monitor International. BMI assumes that the combined Kazakh and Uzbek ethylene capacity is expected to expand from 240,000 tpa in 2009 to 1.49 mln tpa by 2014 with the completion of the KPI complex and the Uzbekneftegas joint venture with five Korean firms. Polymer capacity in the region is set to rise from 465,000 tpa to 1.84 mln tpa largely as a result of the development of these two complexes. The sheer size of recent discoveries in Khuzestan and the potential for many more suggests substantial upside potential in oil. Nevertheless, given the vast gas resources, limited market potential for the fuel and the cost/environmental advantages of a gas-based process, most of Kazakhstan's capacity expansion is likely to be gas-driven. The development of Kazakhstan's petrochemical industry is likely to come through a mixture of world-scale greenfield developments as well as the rehabilitation and modernisation of existing facilities. Production in the petrochemicals industry is also expected to grow remarkably in 2010-2015. Kazakhstan plans to produce petrochemicals products with high added value. Kazakhstan Petrochemicals Industries (KPI)'s plans involve a cracker facility with capacities of 850,000 tpa of ethylene and 450,000 tpa of propylene, feeding downstream units with 800,000 tpa of PE and 450,000 tpa of PP, to come online in 2014. At the same time, the country's domestic market is set to accelerate due to rapid industrialisation and growth in consumer demand. Under the optimistic demand forecast for PE and PP in Kazakhstan by 2013, the per capita consumption is expected to exceed the average world level, and by 2020 the figures could reach the level in developed countries. The average PE consumption worldwide is 8-10 kg and PP consumption is about 5 kg. The most developed countries - the US, Japan and Western European countries - consume about 20-40 kg and 15-20 kg per capita, respectively.
For Uzbekistan, a more gradual expansion of existing capacity is likely. The country intends to exploit more of its gas resources, but is hampered by a lack of investment capital and/or foreign participation. South Korea's KOGAS is planning a gas development project and a gas-based petrochemicals complex in Uzbekistan. The project will involve development of gas reserves in the onshore Surgil field. A gasbased petrochemical complex (50% Uzbekneftegas, 17.5% Honam Petrochemical, 17.5% KOGAS, 15% others) will use ethane and condensate as feedstock to manufacture basic petrochemicals. The US$1.8 bln complex will include an ethane cracker designed to produce 400,000 tpa ethylene and downstream units with capacity for 380,000 tpa high-density polyethylene and 81,000 tpa polypropylene. The complex is expected onstream at the end of 2012.Kazakhstan is aiming to develop capacity for the high fractionation (distillation) of liquid components in natural gas (ethane, propane, butane, hexane), as well as plants for the production of ethylene, propylene, acetylene, benzyl, xylene, rubber, etc. It also plans to add capacity for PE, PVC, synthetic rubbers and plastics fibres (PP and polyamide). A by-product is expected to be the annual production of 800,000 tons of liquefied petroleum gas (LPG), plus other light hydrocarbon products.