QATAR - Petrochemicals Sector.

By 2013, income the natural gas sector and the petrochemicals business would be more than double of Qatar's oil revenue. The petrochemicals sector is controlled by the state-owned Qatar Petroleum (QP), whose JVs are to produce 6m t/y of ethylene by 2013, ethylene dichloride (EDC), polyvinyl chloride (PVC), vinyl chloride monomer (VCM), and propylene and polypropylene (PP).

In a partial privatisation of this business, Industries of Qatar (IQ) was set up in April 2003 as a holding group, with 15% of IQ's share capital of QR5,000m ($1,370m) offered in June 2003 in what then was Qatar's biggest IPO in four years. QP transferred to IQ its stakes in Qatar Petrochemical Co. (Qapco), Qatar Fertiliser Co. (Qafco), Qatar Fuel Additives Co. (Qafac) and Qatar Steel Co. (Qasco). Of the 15% IPO, 20% was reserved for three non-profit bodies - the Qatar Foundation, the Retirement Fund and the Ministry of Religious Endowments and Islamic Affairs.

The IPO, part a plan to distribute wealth and raise the private sector's profile, was managed by seven local banks. Qatari firms were allowed to buy shares after the IPO was closed, with priority given to individual investors. IQ was listed on the Doha Securities Market (DSM), and QP was advised by HSBC, Clifford Chance and Ernst & Young. IQ has a seven-member board appointed by QP, which provides assistance. QP will keep the majority in IQ for some time before selling parts of its stake in a pattern somewhat similar to privatisation of the Saudi Arabian Basic Industries Corp. (SABIC - see survey of Saudi Arabia to be serialised next month).

The Ras Laffan Industrial City (RLIC) will be one of the fastest growing industrial zones in the Middle East. QP is having a massive common sea-water cooling system built at the RLIC in a $400-500m engineering, procurement and construction (EPC) project for phases 2-3 of the system involving 765,000-cubic-metre-an-hour (cm/h) expansion of the existing seawater facilit. Phase-2 covers 561,120 cm/h and phase-3 203,880 cm/h. Bidders include Athens-based Consolidated Contractors Int'l Co. (CCC) with Chiyoda Corp. of Japan, Paris-based Technip, Marubeni Corp. of Japan, Gama of Turkey and Petrofac Int'l and Dodsal, both UAE-based. The job will include sea-water intake and discharge channels, pump substations, a chlorination plant, cooling towers, heat exchangers, two pumping stations, pipeline manifolds and instrumentation and control systems. QP will supply two long-lead items - the main seawater cooling pumps and the glass-reinforced plastic piping - which will be supplied to the EPC contractor. Technip is the front-end engineering and design (FEED) contractor and has done studies and the designs for the expansion. On-site work is to start in early 2006. The project will be completed in phases, with the first part to be ready in October 2007. Final completion is set for early 2009.

The expanded cooling system is to cater for new industry. Phase-1, completed in 2003 by CCC/Chiyoda, involved a 300,000-cm/h unit. CCC has the $100+m engineering, procurement, installation and commissioning (EPIC) contract on the LNG1/W4 project, which will see the planned Qatar Liquefied Gas Co.-II (QatarGas II) complex and the Ras Laffan ethylene cracker tied to the existing sea-water cooling system.

Under QR419m ($114m) EPC job won last July, Tekfen of Turkey is building the Ras Laffan-Mesaieed ethane pipeline. From mid-2007, this will pump ethane to industries in Mesaieed, including Qatar Chemical Co.-I (Q-Chem-I). The job calls for of a 16 inch, 130-km pipeline and a 24-inch, 13-km pipeline along with construction of a new pumping station and modifications to six existing stations. Welspun of India will supply the pipe and Itochu/Hitachi will supply the compressors.