Despite hydrocarbon reserves, Central Asian countries have underdeveloped petrochem sector

28-Nov-08
Despite hosting considerable hydrocarbon reserves, many Central Asian countries have relatively underdeveloped petrochemicals industries as per BMI's latest report. Kazakhstan and Uzbekistan are the two exceptions. Kazakhstan is one of the largest crude oil producers in the world but lacks adequate refining and processing facilities. However, with a number of projects lined up, the future of the Kazakh petrochemicals industry appears promising. About 5% of industrial production in Uzbekistan is accounted for by chemicals and petrochemicals. However, most of the country's chemical plants are outdated and require efficiency enhancements. The country has sizeable reserves of natural gas rich in ethane, which can adequately support its indigenous petrochemicals industry. Being landlocked, Uzbekistan is faced with high transportation costs. State-owned KazMunaiGaz and Uzbekneftegaz dominate the petrochemicals industries of Kazakhstan and Uzbekistan, respectively. Five major petrochemicals projects worth US$5.7 bln are lined up in Kazakhstan. These include an integrated petrochemicals complex in the Atyrau region, a bitumen complex in Akhtob, an ethylenebenzol complex and an A-class tyre producing complex in southern Kazakhstan, and a natural and oil-well gas treatment complex. Kazakhstan Petrochemical Industries (KPI) - a joint venture between state-owned KazMunaiGaz and local SAT - has outlined plans to develop an integrated petrochemicals complex in the Atyrau region. In August 2007, KazMunaiGaz signed an agreement for cooperation in oil and gas sectors with Azerbaijan's state-owned national oil company which covers - among other things - the transportation of Kazakhstan's oil and petrochemical products. South Korean state-owned company Kogas is considering a gas development project and a gas-based petrochemicals complex in Uzbekistan. The company will form a JV with state-owned Uzbekneftegaz for the proposed project. The Kazakh government has unveiled major development plans for the country's petrochemicals industry. Investments in the region of US$7.5bln are expected by 2015. KazMunaiGaz plans to invest more than US$1.6bln on modernisation and reconstruction of the country's three refineries before 2009. Uzbekistan's petrochemicals industry is likely to grow at a comparatively slower pace due to paucity of investment capital and limited foreign investment.
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