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Petro-chemical development.

Petro-Chemical Development


The Saudi-European Petrochemical Company (lbn Zahr) has signed contracts for the construction of two major petrochemical plants over the next two years. The first is for a 200,000 tonne per year polypropylene plant, the second for a 700,000 tonne methyl tertiary butyl ether (MTBE) unit.

Ibrahim ibn Salamah, Vice Chairman and Managing Director of the Saudi Arabian Basic Industries Corporation (SABIC), said the two accords were the latest in a series of steps taken this year to boost the Corporation's production during the 1990s. Ibn Zahr's Chairman, Moayyed Al-Qurtas, who is also SABIC's Director General of research and development, signed the polypropylene contract with the John Brown Engineering and Construction company and the MTBE construction deal with the Italian firm, Snamprogetti.

Construction of the polypropylene plant is scheduled to take two years. It is stated to go on stream in the third quarter of 1993. The plant, using Union Carbide's Unipol technology, will be equal in size to the current largest Unipol polypropylene facility, now operating in South Korea. With the introduction of polypropylene manufacturing at Ibn Zahr, Sabic will be able to produce all the major thermoplastic resins. The Corporation already manufactures polyethylene, polyvinyl chloride and polystyrene, for both domestic and international markets.

Construction of the MTBE plant is due to be completed in 28 months and it will go into operation in the fourth quarter of 1993. The unit will boost Ibn Zahr's total production of MTBE from the current 500,000 tonnes per year to 1.2 million ton. Ibn Zahr is a joint venture between SABIC, which holds a 70 per cent share, and the Arab Petroleum Investment Corporation, the Italian firm Ecofuel and Finland's Neste Ob, which each own ten per cent. It has been in operation since 1988 and employs 250 people, 64 per cent of whom are Saudi nationals.


Discussions have begun among five firms over the construction of the first ever multi-million dollar methanol production plant in Nigeria, in a bid to further exploit the nation's abundant natural gas resources.

The Republic newspaper disclosed that the project was one of five proposals received by the Petroleum Resources Ministry from companies wishing to produce methanol or methyl-alcohol. The five-party consortium comprises the Nigerian National Petroleum Corporation (NNPC), Gulf Oil Nigeria (GOCON) Pencol International, Mannesman and ICI. Authoritative sources said that under the proposed venture the NNPC and GOCON, in a joint arrangement, would supply the associated nature gas required for the plant's operations. The three other firms intended to pool their resources to set up the plant and utilize the gas supplied to produce methanol. A detailed proposal on the plant was presented last April to the Nigerian Minister of Petroleum Resources.

The entire production expected from the plant was being embarked by the sponsoring companies for the export market. Methanol a high butane gas manufactured from synthesis gas in a catalytic reactor is an important feedstock for the chemical and petrochemical industries and an intermediate product in the manufacture of such items as adhesives, polyplastics, synthetic fibre, pharmaceuticals and fuel.


Iran is confident of becoming one of the leading world producers of petrochemicals in the next few years with an annual manufacture of 5.32 million tons, thereby saving the national economy $2.65 billion each year. Since March 1990 Iran has produced 1.6 million tons of petrochemical products, a 60 per cent increase over the same period in 1989.

However, although Iran was self-sufficient in nitrogenous fertilizers, out of its 1.25 million ton annual phosphate needs, around 1m ton still have to be imported. Iran's petrochemicals industry began only 30 years ago-the first consolidated organization for the purpose was the chemicals company of the Ministry of Economy, which founded the Marvdasht compost plant in Fars province in 1959.

The Shiraz Petrochemical Complex became operational in 1963. Other units have been built, including those for producing sodium carbonate, sodium bicarbonate, mixed fertilizers, sodium phosphate, ammonia, urea, nitric acid, ammonium nitrate, alkali chlorine and methanol hydrochloric acid. The Razi Chemical Complex became operational in 1970 and was acquired by the NIPC three years later. It was inoperative during the Gulf war but resumed production in February 1989. The principal products of the complex are azote, phosphate and sulphur composts.

The Abadan Petrochemical Complex, set up in 1971, produces caustic soda, PVC for plastic manufacturing plants and DDB for detergent manufacturing factories. Operations were discontinued during the war but resumed in November 1989.

Also hit during Gulf hostilities, the Kharg Chemical Complex was built in partnership with Amoco and started production in 1969. It was rebuilt after the war and resumed operations at full capacity in 1989. Its main products are gas liquids and export quality sulphur. The Farabi Petrochemical Industries Complex was set up in 1972 by Iran and Japan on a 50:50 basis. Located near the Razi Chemical Complex, it mainly makes materials for softening plastics and certain types of anhydrates.

Other minor facilities include the Polika plant with a capacity of 10,000 tons per year for PVC and DOP, and the Pasargad Chemicals Company, founded in 1963 and producing 5,000 tons of chlorides and 6,000 tons of caustic soda per year. Its operations were disrupted by the war, but it has since been relocated at Shiraz and now operates under the name, the Alkaline Chloride Project. The NIPC has a number of major Petrochemical projects due for completion in the next five years, the most important being at Arak, Tabriz, Bandar Imam, and Isfahan, as well as ammonium phosphate project, a chlorine project, the Khorasan compost scheme, a melamin crystal project and an industrial soot factory.


The International Finance Corporation (IFC) has signed a $195 million agreement with Pequiven, a subsidiary of Petroloes de Venezuela (PDVSA), the state oil company, and two private investors, towards the financing of a petrochemical plant in Zulia State, western Venezuela. The plant, which will be built by the IFC, private investors and Pequiven, will produce ethylene glycol and ethylene oxide, key ingredients for making plastics, detergents and other chemical products.

Under the terms of the agreement, the IFC, an affiliate of the World Bank and the International Monetary Fund, will lend Pequiven and two private sector partners $32m to build the plant. The investors have formed a company called Pralca, which will operate the plant and distribute its production. The IFC will hold ten per cent of the shares in the project as part of the financing deal, while Pequiven will have 49 per cent. Pequiven's. Venezuela's Corimon Group will hold 16 per cent in the venture. The other partner in Pralca is the US Olin Corporation, which has a 25 per cent share.

The Andean Development Corporation is also providing $42m. in financing. When completed in the second half of 1992, it will produce 72,000 tonnes of ethylene glycol. About 45 per cent of the production will be used to cover domestic demand, while the remaining will be exported to countries in the Andean Pact or other Latin American nations.

Ethylene oxide is primarily used by the oil industry to remove water from crude oil and to make the emulsifier used in |Orimulsion', a fuel substitute developed by the PDVSA to compete with coal. It is also used to make detergents, cosmetics and anti-rust agents. Ethylene glycol is used in the textile industry as a base for making artificial fibres. It is also a primary ingredient in anti-freeze and certain types of plastics.


A $500 million petrochemical complex is to be constructed on Bintan island in Indonesia's Riau archipelago. The plant, to be sited at Tanjung Urban under a joint venture with a foreign company, would provide raw materials for the plastic industry, using naphtha and liquefied petroleum gas as feedstock, some of which would be imported. The project is being seen as beneficial to both Singapore and Indonesia, in line with recent efforts to promote the region's |triangle of growth', comprising the two countries plus Malaysia.

Bintan island would have the broad-based large and medium-sized industries, while nearly Bantam island possessed the high-technology operations. Any spillover of industries that could not be accommodated on Batam island would be channelled to Bintan.


Three petrochemical projects have recently won approval from the government. An MTBE/propylene/propylene plant is about to be constructed in Kuantan Pahang. The project is a joint venture comprising Petronas, Neste Oy of Finland and Mitsubishi Company of Japan. The Government in mid-July approved a naphtha cracker to produce ethylene and propylene for subsequent conversions to polypropylene and polyethylene resins. In June, the Government also approved and put to tender a styrene and acrylonitrile butadiene-styrene resin project for location in Pasir Gudang, Jahore.

Malaysian economic planners are clearly in a rush to attract more sophisticated foreign expertise in this sector. The recent foreign investment code passed this spring lavishes to petrochemical sector with every conceivable economic attraction, from tax holidays to virtual diplomatic status for corporate executives.


Qatar is planning to set up two major petrochemical projects with Canadian collaboration. Details are now under discussion between the Qatar General Petroleum Corporation (QGPC) and the Canadian firm, IPL. Plans had also been approved to double the respective capacity of the Qatar petrochemical complex and the Qatar fertilizers complex.

PHOTO : Shipment of MTBE produced by the Saudi European Petrochemical Co. (IBN ZAHR) was loaded at King Fahd Industrial Port for shipment to Rotterdam's Europost
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Title Annotation:Global Outlook
Publication:Economic Review
Date:Nov 1, 1991
Previous Article:Market report of viscose fibre.
Next Article:The world economic outlook and developing countries: a review of 1990.

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