Kuwait focuses on downstream development in olefins

Though a wide range of sectors have been fostered in Kuwait’s manufacturing sector, nearly all rely on hydrocarbons either as feedstock or to provide cheap sources of energy to process imported feedstock. Though most of these industries have proved profitable Kuwait has turned focus to olefins. Petrochemicals Industries Company (PIC) has decided to shut its fertiliser plant at Shuaiba due to the shortgae of gas. PIC plans to sell off or shut down its fertilisers business, one of the company's oldest arms to focus on its more profitable petrochemicals division. Kuwait embarked upon chemical fertiliser production in 1966, gradually totaling to 3 ammonia plants and 2 urea plants. However, being heavily reliant on gas as its basic feedstock for production, the fertiliser sector now has to compete with other petrochemical industries for the same raw material. With the completion and subsequent launch of the Olefins II project in June, managed and operated by Equate, a joint venture between Dow and PIC, Boubyan Petrochemical Company and Al Qurain Petrochemical Company, Kuwait's industrial development has taken a major step forward. The new facility combines a 850,000 tpa ethane cracker, a 600,000 tpa ethylene glycol unit; a 450,000 tpa ethyl benzene/styrene monomer unit, and a 225,000 tpa polyethylene unit. PIC and its partners have plans to further expand olefins output, with a proposal to develop Olefins III, a new high-tech cracker that would produce about 1.4 mln tpa of ethylene. Though still in the planning stages, work on the new US$7-8 bln facility is expected to begin by 2015. It is essential to ensure a guaranteed source of energy and feedstock to Kuwait's petrochemicals industry to avoid the same shortages that affected fertiliser production. Gas consumption in the Kuwaiti industrial sector has fallen from 13 mln m3/day in 2005 to current levels of 10.5 mln m3/day. These shortages have seen the country become a net importer of liquid natural gas (LNG), with gas even shipped from as far afield as Russia.