Kuwait plans to double petrochemical capacity to 7.9 mln tpa by 2015 at CAGR of 32%

21-Aug-14

Anticipating increased demand, Kuwait has planned to expand its petrochemical capacity from 3.4 mln tpa in 2012 to 7.9 mln tpa by 2015 at a compound annual growth rate of 32%. Petrochemical projects worth $7,565 million are expected to be executed in Kuwait between 2011 and 2017, as per a report by Kuwait Financial Centre (Markaz). Kuwait implemented 100% FDI law in 2010, which is expected to bring in foreign investors and encourage private players in the petrochemicals sector, which, till now, has been mainly funded by the Government of Kuwait. Major Petrochemical projects under construction by the Petrochemicals Industries Company (PIC) are the Olefins – III plant at the Shauiba Complex of Kuwait worth $7,000 million which is expected to be operational from 2015. China integrated refinery is the overseas plant constructed by PIC and Sinopec at the Guangdong province in China. It is expected to be operational from 2017 and will help PIC to capitalise on the huge market for petrochemicals available in China. Though the Kuwait petrochemicals sector is poised to see growth, it faces a few challenges and impediments on its growth path. There is stiff competition from players within the region, especially from Saudi Arabia, which accounted for 75.2% of the total revenue of the petrochemicals sector in the 2012. Kuwait’s Petrochemical Industries Company is implementing the 2002/2020 development strategy to develop this petrochemical sector locally as well as launching joint petrochemical ventures in major markets such as India and China.