NEWS, DATA AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES SEPTEMBER 2010 REGIONAL NEWS 05 | CEO INTERVIEW 25 | EVENT PREVIEW 38 | PUMPS VENDOR SURVEY 42 | YANBU SNAPSHOT 48 TESTING TIMES ADVANCED LAB EQUIPMENT IS THE QUALITY GATEKEEPER QATAR EXCLUSIVE QAPCO GENERAL MANAGER TALKS UP HIS DOWNSTREAM AMBITIONS COUNTRY SEEKS $20 BILLION TO REVITALISE ITS DILAPIDATED DOWNSTREAM SECTOR COUNTRY SEEKS $20 BILLION TO REVITALISE ITS DILAPIDATED DOWNSTREAM SECTOR OPEN FOR BUSINESS IRAQ LOCAL MOTION: AIR LIQUIDE MOVING INTO KUWAIT JACQUES DE THEZY, MIDDLE EAST CHIEF EXEC, SAYS $80 MILLION INVESTMENT IS JUST THE START SUPPLY CHAIN FORUM PREVIEW An ITP Business Publication, licensed by Dubai Media City
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NEWS, DATA AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES SEPTEMBER 2010
15 UP AND RUNNINGDr Mohammed Yousef Al-Mulla, general manager of QAPCO says a new production will transform Qatar’s downstream capabilities
20 IRAQ COUNTRY PROFILEAfter decades of neglect Iraq’s refi ning sector will need to burst back into action if its downstream vision is to be realised.
September 2010 Volume 3 Issue 9IN PRINT
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1Contents
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
Online2
Petrochemicals Middle East September 2010 www.arabianoilandgas.com
MESC Group has recently been awarded a contract from GS Engineering & Construction to supply instrumentation cables for Takreer Abu Dhabi.
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Italian energy company ENI is to start renegotiating its long-term natural gas contracts with Algeria and Libya.
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ONLINE GALLERY
The online home of:
1 Petrofac wins 2nd KOC EPC contract in 2 weeks
2 Aramco chief’s message to industry
3 Tecnimont awarded project by Kuwait’s KNPC
4 Shaw Group wins Takreer PMC contract
5 Interview: Deputy MD NK asset KOC Hosnia Hashim
KBR announced that it has been selected by BP to undertake the second stage of concept selection and defi nition for the onshore terminal and export pipelines.
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Saudi Aramco is expected to change the location of the Jazan oil refi nery after it cancelled tenders to construct a harbour in Jazan.
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EDITOR’S CHOICE
TIME TO BUILDInterview with Salem Shaheen, president and CEO of SATORP
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WEB FORUM
An Eye on NatpetArabianoilandgas.com picture gallery takes you behind the scene of NatPet with brand new photographs of the private polypropylene producer.
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BREAKING NEWS AND VIEWS FIRST
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MESC WINS US$14M FOR TAKREER REFINERY EXPANSION
ARAMCO TO CHANGE JAZAN REFINERY LOCATION
KBR WINS SECOND CONTRACT FOR BP’S EGYPTIAN TERMINAL
ENI IN NORTH AFRICAN GAS CONTRACT RENEGOTIATIONS
Aramco’s new board Arabianoilandgas.com brings you the names of the new board of directors of Saudi Aramco for the next three years. Al-Falih remains as CEO of Aramco.
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Is a global exporters’ forum a workable idea?Iran’s Ministry of Petroleum has suggested the formation of a global
forum for exporters of petrochemical products – the ‘Petrochemical Exporting Countries Forum (PECF)’ – with Saudi Arabia, Russia, Qatar,
and Turkey the additional members. The idea would be to create something similar to the Organization of Oil Exporteing Countries (OPEC) or the Gas Exporting Countries Forum (GECF).
According to the managing director of the National Petrochemical Company, Abdolhossein Bayat, the forum would strive to bring order and co-ordination among exporters in the areas of pricing and production practices, as well as the nature of their market presence in target countries.
In an age of globalization, as the world is reduced to a small village, establishing this kind of association is a logical idea. It will arguably boost the position of producers in the market, strengthen their negotiating position, and improve cooperate between its different members.
Apart from Africa, every continent around the world has its own member-run petrochemical association. In the Middle East, the majority of petrochemical companies are members in the Gulf Petrochemicals and Chemicals association (GPCA), and some of them are members of the Arab Association of Petrochemical Syndicates or the Arab
Fertiliser Association (AFA).Personally, I don’t think that such a global association would be realized. The agendas of the proposed members
are simply too different. Even if it is established, the example of the Gas Exporting Countries Forum
(GECF) has shown that it would have no infl uence on price setting or on issues of supply.
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Do you think that establishing a forum for petrochemical exporting countries is good for local producers?
Comment4
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
Qatar swoops on Algerian assetsNews
Qatar Petroleum (QP) has joined the Franco-Algerian partnership between Algeria’s state-owned Sonatrach and French integrated oil major Total in a joint venture project to construct a 1.4m t/y ethane cracker in Arzew, on the western coast of Algeria, accord-ing to an unnamed source close to Sonatrach.
“The Algerian government has accepted the entrance of QP in the project, which will hold 10% of the project,” the source told Refi ning and Petrochemicals Middle East.
The project has an estimated CAPEX of US$3 billion and en-compasses the construction of a new ethane cracker and three polyolefi n production lines.
Initially, Sonatrach had award-ed a contract to Total to construct the ethane cracker, in which Total had a controlling 51% stake of the project, and Sonatrach 49%.
However, new government regulations dictate that local part-ners must control the majority of any project with foreign compa-nies, which has forced Total to relinquish part of its share.
This situation has affected the development of the project which was originally slated for comple-tion in 2013. “Now the Algerian and the French government have reached an agreement allowing QP to control 10% of the project, Total 39% and Sonatrach 51% of the project,” the Algiers-based source said.
Qatar Petroleum takes 10% stake in new 1.4m tonne ethane cracker project in Arzew
“The partners will resume work on the project very soon, as the government does not want any further delay in the project,” he said. “The project is considered critical to the Algerian govern-ment’s downstream ambitions.”
Total declined to confi rm fi nancial information relating to
the project, but said it was still 100% behind the project.
“We continue talks with Sonatrach and we remain to-tally committed to the project,” Burkhard Reuss, petrochemical communication manager at Total told Refi ning and Petrochemicals Middle East.
QP and Sonatrach declined the invitation to comment.
The proposed cracker will have a 1.4m t/y of ethane capacity, and will produce 1.1m t/y of ethylene. The ethylene will be processed into 410 000 t/y of mono ethylene glycol, 350 000 t/y of high den-sity of polyethylene (HDPE) and 450 000 t/y of linear low density of polyethylene (LLDPE), princi-pally slated for export.
The LNG 1 and 2 plant at Arzew will provide ethane feedstock to the cracker. Total won the project in 2007 beating off competition from SABIC. The Saudi Arabian chemical giant said it remains in-terested in establishing a project in Algeria, and is keen to benefi t from cheap feedstock and its prox-imity to the European markets.
The ethane cracker in Arzew will be linked to the liquified natural gas plant which will provide the ethane feedstock to the proposed cracker.
The industrial city of Arzew (pictured) is home to much of Algeria’s downstream production.
SEPTEMBER 2010
5News
Aramco-Dow JV is on trackFEED work of the project expected to be completed by mid 2011
Saudi Aramco and The Dow Chemical Company have an-nounced that their joint venture petrochemical project contin-ues to make progress with the front-end engineering and design (FEED) work expected to be com-pleted in mid-2011, Saudi Aramco said in a statement.
The two partners confi rmed that they have decided on Jubail Industrial City as the planned site location for the project. The deci-sion comes after having evaluated a broad set of variables, which in-cludes anticipated infrastructure benefi ts and potential business integration opportunities.
Jubail Industrial City is the largest industrial complex of its kind in the world. It is located in the eastern province of the King-dom of Saudi Arabia.
Abdulaziz Al-Judaimi, Sau-di Aramco’s vice president
GPCA regrets Indian ADD QPIC profits decline 18%The petrochemicals and chemi-cals industry in the Gulf region strongly opposes the recent de-termination of India’s Ministry of Commerce to apply anti-dumping duties on exports of polypropyl-ene from the Gulf region, said Dr Abdulwahab Al-Sadoun, secretary general of the GPCA.
According to the disclosure re-port issued by India, the Indian Government decided to apply anti-dumping measures against polypropylene exports from Oman and Saudi Arabia. The secretary general of the GPCA said the decision is not justifi ed because GCC companies are nei-ther dumping products in India nor causing injury to the Indian petrochemical industry.
responsible for the project, said: “We continue to execute the proj-ect. The commitment of both partners demonstrates the strate-gic importance of this project and the benefi ts of investing in the Kingdom of Saudi Arabia.”
Dow senior vice president Jim McIlvenny commented: “The project has and continues to ben-efi t from the shared dedication
and hard work of top talent from Dow and Saudi Aramco. The proj-ect team will continue to evaluate all variables that could impact the ultimate investment decision and the relevant stakeholders.”
The partners have not disclosed yet, whether the name of the proj-ect will be changed or keep its initial one Ras Tanura Integrated Petrochemical Project (RTIP).
The project was originally slated for Ras Tanura but has since been relocated to Jubail.
KNPC contains crude oil leakage near Al-AhmadiKuwait National Petroleum Com-pany (KNPC) said that a limited oil leak occurred early August during a transportation operation to one of its oil tankers near Al-Ahmadi Refi nery.
KNPC’s acting director of pub-lic relations and information, Ah-mad Al-Muzaiel, said the leakage has been contained, noting that emergency teams were at the scene and had stopped the leak quickly. “In total around 10 bar-rels of crude oil have leaked,” the acting director of public relation said. The offi cial added that spe-cialised emergency teams in co-operation with the naval forces in the area had managed to contain the spread of crude at the site.
Al-Muzaiel noted that other teams were also dispatched and were in charge of cleanup op-erations which reached near the shores areas.
Qurain Petrochemicals Industries Company (QPIC) announced a net profi t of US$5.72m for the fi rst half of 2010 ended 30 June 2010, compared to $32.6m in the same period of 2009.
The decline in earnings is largely due to lower petrochemi-cal prices in the fi rst half of 2009 and pre-operating expenses of as-sociate companies, namely The Kuwait Aromatics Company, the company said.
Commenting on the results, Sheikh Mubarak Abduallah Al-Sabah, Chairman of QPIC said: “This year we had some signifi -cant pre-operating expenses in addition to the fact that we are coming out of the petrochemical downturn of 2009. As a result,
Al-Sadoun said the Indian an-ti-dumping authorities decided to take the unprecedented ap-proach of rejecting the local price of feedstock used to manufacture polypropylene because the price when sold in Saudi Arabia is “con-siderably lower” than the price available in India. He observed that for obvious commercial rea-sons, including proximity to the source and low local production and distribution costs, the price of feedstock in Saudi Arabia, as in the Gulf region generally is more competitive than in other coun-tries including India.
He confi rmed that WTO rules do not allow India to use ADD measures to protect its industry from fair trade competition.
we expect 2010 to have very mod-est returns. However, all of our plants in Kuwait are now fully operational and we expect the re-turns we are seeing this year from our plants to be refl ected in our profi ts in 2011.”
“Overall, our income was in-line with our expectations and we have seen our shareholder equity increase by 20% around $104m compared to the same period last year. QPIC also enjoys a solid cash position that will allow it to take part in potential opportuni-ties in the sector,” he said.
Dividend income from Equate and The Kuwait Olefi ns Company totalled $26million compared with $39.77million earned in the previous year.
News 6
Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Qapco opens new warehouse in LebanonQatari Deputy Prime Minister and Minister of Energy and Industry, Abdullah bin Hamad Al Attiyah, recently inaugurated Qatar Pet-rochemical Company’s (Qapco) Logistics Services Establishment in Tripoli, Lebanon. High ranking offi cials from Qatar and Lebanon attended the ceremony.
Al Attiyah, who is also the board chairman of Qapco said that Qa-tar is proud of its distinguished economic and political relations with Lebanon, and that opening the company’s warehouse in Leb-anon would further boost and en-hance bilateral relations between the two countries.
“We look with great admiration at the economic progress and de-velopment that Lebanon has been witnessing, despite the hardships
the country has ex-perienced in the past years. Such achieve-ments came due to its peoples’ strong will and determina-tion to succeed,” he said.
Dr Mohammed Yousef Al-Mulla, general manager and board mem-ber of Qapco, said that Qapco has good presence in the Lebanese market, since it opened its repre-sentative offi ce in 2006.
“Opening our Logistics Ser-vices Establishment in Lebanon will defi nitely help us meet our customers’ increasing demands, as our exports of petrochemi-cal products are reaching up to 20 000 MTA,” he added.
Qapco’s global marketing net-work currently consists of 28 over-seas representative offi ces and logistics services establishments. The offi ces are located throughout Asia, Northern Africa and Austra-lia. “We hope that we can now have faster access to our custom-ers, and that the high quality prod-ucts and excellent services will be up to their expectations,” said Al Mulla.
Saudi Minister of Commerce and Industry, Abdullah bin Ahmad Zainal Alireza issued a decision approving the declaration of founding Aramco-Total Arabian Services Company, as a closed stockholding company. The planned Jubail-based company’s paid up capital is US$533 000 divided into 200 000 shares.
Pars Petrochemical Company in Assalouyeh, Iran, exported 137 000 tonnes of liquid gas and styrene monomer to East Asian countries in the period between June 22-July 22. Pars Petrochemical Complex is widely thought to be the fi rst processing phase of Assalouyeh’s South Pars gas fi eld.
A Chinese consortium is to fi nalise a US$1 billion fi nancing deal with the Iranian National Petrochemical Company (NPC) to fund Iranian petrochemical projects, during the third quarter of this year. The cash injection will be allocated to the top priorities in Iran’s petrochemical sector, Mehr News Agency reported.
Kuwait’s Petrochemicals Industries Company (PIC) is investing US$10bn in the next fi ve years in major downstream projects in Kuwait and Asia, according to Maha Mulla Husain, PIC’s chairman and managing director. “We plan to establish the third olefi n project in Kuwait, and an oil refi nery in China,” she said.
BriefsERC signs US$2.35bn dealThe Egyptian Refi ning Company (ERC) has signed up with fi ve in-stitutions to raise US$2.35 billion in senior debt to fi nance construc-tion of its $3.7 billion second-phase oil refi nery in the greater Cairo area, the company said.
In addition to the senior debt package, which has been sub-scribed by Japan Bank for Inter-national Cooperation, Nippon Ex-port and Investment Insurance, the Export-Import Bank of Korea, the European Investment Bank and the African Development Bank, the company has raised subordinated debt of $225 mil-lion from Mitsui and Company, which is part of the consortium of contractors building the refi nery, and AfDB.
The refi nery will produce four million tonnes of refi ned prod-ucts per annum when completed,
New debt will be used to finance its Cairo refinery expansion project
including 2.3 million tonnes of Euro V diesel, the cleanest fuel of its type in the world.
“We are delighted to announce the debt package for what we be-lieve stands as one of the largest project fi nance deals ever assem-bled in Africa,” said Citadel Capi-tal MD Marwan Al Araby.
ERC is a joint venture between private equity fi rm Citadel and the state-owned Egyptian Gener-al Petroleum Corporation. EGPC controls 15% of the project.
“ERC has won outstanding backing from leading global insti-tutions because it will have a no-table effect on both Egypt’s econ-omy and on the environment, particularly in the Greater Cairo Area. It has similarly enjoyed the full backing and support of the Government of Egypt in particu-lar,” Al Araby said.
News of the debt package came just weeks after the International Finance Corporation announced it would invest equity of $100 million in the project.
The refi nery, to be located in the Greater Cairo district, will sell its production to EGPC under a 25-year off-take agree-ment at in-ternational prices.
Qapco is boosting its logistics network across the Middle East.
Marwan Elaraby,
Managing Director of
Citadel Capital.
7News
Petrochemicals Middle East September 2010www.arabianoilandgas.com
BUILD&PROJECTS8
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Saudi International Petrochemi-cal Company (Sipchem) said that it has signed agreements with French chemicals company Rho-dia to build a new ethyl acetate (EA) plant in Saudi Arabia.
As part of its Phase-III ex-pansion programme, Sipchem is to construct and operate the 100 000t/y ethyl acetate plant in Jubail Industrial City. The agreements included a technol-ogy license agreement, a market-ing agreement and a term sheet for ethanol procurement with Rhodia. The project is expect to cost US$106m, and is completely owned by Sipchem.
Sipchem said that access to Rhodia’s EA technology and
know-how will ensure that the quality and cost of production of the EA plant will meet and ex-ceed world class standards. The EA plant will also be designed as a swing facility to produce butyl
Sipchem commits to new EA plantThe US$106 million ethyl acetate plant is expected to be commissioned during 2013
acetate as well. The EA plant is expected to be commissioned during 2013.
“This deal is a fi rst step in our cooperation with Sipchem and in the region,” Kamel Vincent,
The project is the first for Rhodia in the region and will produce 100 000t/y of ethyl acetate.
Rhodia’s Phenol Solvents presi-dent told Refi ning and Petro-chemicals Middle East. “The proj-ect has already started in terms of engineering studies and the plant should be operationel early 2013,” he said.
The feedstock required to pro-duce ethyl acetate is acetic acid, which will be obtained from Sip-chem’s affi liate, International Acetyl Company. The ethanol will be imported from international markets with the assistance of Rhodia. “The markets for the product are mainly the paints, coating, and automotive indus-tries, but ethyl acetate is also used in most of the consumer and in-dustrial goods markets,” he said.
KNPC awards $400m LSTK contract to Tecnimont
MBM Holdings, a Dubai-based investment company, said it will invest US$400 mil-lion to build a plant in the UAE to manufacture polysilicon.
“The proposed plant will produce 2 500 tonne per year of solar-grade polysilicon, and it will be the fi rst factory in the region to produce polysili-con when completed in early 2012,” the company said.
A new company has been created to develop the proj-ect, MBM Solar Holding, a JV between MBM Holdings and Lancaster Holdings Interna-tional, a closely-held company that acquires underperform-ing businesses in Asia.
ABB has won a US$20 million contract from Saudi Petrochemi-cal Company (Sadaf) to imple-ment a power factor correction and power management solution at the company’s Jubail manufac-turing complex, the company said in a statement.
ABB’s solution will help Sadaf improve its network effi ciency and, signifi cantly reduce the elec-tricity losses while improving the stability of its power supply.
“Petrochemical facilities are very energy intensive and any variation in the power factor will result in higher losses and reduced transmission capacity,” said Veli-Matti Reinikkala, head of ABB’s process automation division. “By providing reliable power factor
Maire Tecnimont announced that it has been awarded a contract to develop an acid-gas removal plant (AGRP) for Kuwait National Pe-troleum Company (KNPC).
The project will be executed on a Lump-Sum Turnkey con-tract basis for approximately US$400m and expected to be completed by 2014.
The contract foresees the provi-sion of engineering, procurement, construction and commission-ing (EPCC) services for a brand new process train of gas handling and sweetening facilities - a new AGRP unit.
The new AGRP facilities will be capable of handling as much as 230 million cubic feet-a-day of gas and 78 000 barrels a day of condensates.
correction solutions and infra-structure, we are helping our cus-tomers such as Sadaf to optimise the productivity and effi ciency of their operations as well as realise signifi cant cost savings.”
ABB’s contract is a lump sum turnkey project which includes the construction of a new sub-station for installation of power factor correction equipment, the supply of a power management solution to be integrated along with existing high and medium voltage electrical system into the plant’s electrical grid, as well as the installation and commission-ing activities. The power factor correction solution will consist of nine banks of correction equip-ment totaling 109 8 MVAR.
Petro Rabigh resumes operation at HOFCC unitRabigh Refi ning and Petrochemi-cal Company (Petro Rabigh) said that its high olefi n fl uid catalytic cracking (HOFCC) had broken down due to a problem in one of the valves, and that it resolved the issue on August 6.
In a statement published on the website of the Saudi stock ex-change (Tadawul), the company said that the problem had forced stoppage of production of ben-
zene and polypropylene from the company complex in Rabigh.
The company said that it had enough benzene and polypropyl-ene inventories at its warehouse which allowed it to cover the shortage during that period.
The HOFCC plant at Petro Rabigh is one of the largest in the world. It produces 900 000t/y of propylene, which is used to pro-duce 700 000t/y polypropylene.
Saudi Kayan has started com-missioning its mono ethylene glycol and polypropylene plants at the company complex in Al-Jubail Industrial City, on the Eastern coast of Saudi Arabia.
The company said in state-ment published to the Saudi Stock market that it started the commisioning production on August 4th.
Kayan said in early July that it started commissioning its olefi n plants, which the company will use as part of its feedstock for the ethylene glycol and the poly-propylene plants.
Saudi Kayan confi rmed it was seeking further bank fi nanc-ing, with the help of SABIC, to cover an astonishing US$2.4 bil-lion rise in the building costs of the complex.
NatPet starts commercial productionSaudi joint stock company, Saudi Alujain Corporation said that its subsidiary National Petrochemi-cal Industrial Company (Natpet) has started commercial produc-tion at its propylene and polypro-pylene plant in Yanbu Industrial City, the company said in a state-ment to the stock exchange.
“This key milestone is achieved subsequent to the Propane De-hydrogenation (PDH) plant ac-ceptance with noted exceptions, and after witnessing stable and safe running of the PDH and PP plants for two consecutive months from the date of success-fully completing the minimum
Production at the propylene and polypropylene plants reached 32 850 tonnes per month
NatPet produces 400 000t/y of polypropylene, and it exports it mainly to Asia and Turkey.
PetroRabigh undertook a 48-hour maintenance programme at its oxygen and nitrogen plants.
Kayan is located in Al-Jubail industrial City.
Kayan starts MEG and PP plants commissioning
OPERATIONS&MAINTENANCE
performance test on 5th August,” the statement read.
The monthly production of the propylene and the polypropylene plants in Yanbu, during that pe-riod reached 32 850 tonne per month (equivalent to 394 200 tonne per year).
The company started commis-sioning its project last Novem-ber, which was initialy supposed to start in early 2008, but due to the technical problems the com-pany faced, Natpet was obliged to postpone the commercial start up till the second quarter 2010.
NatPet is expected to produce 400 000 tonne per year of poly-
propylene, which is sold under an off take agreement signed
with SABIC and Noble, to market its product in Asia and Turkey.
The Saudi Kayan operation is a joint venture company between Saudi Basic Industries Corpora-tion (SABIC), which controls 35%, Al-Kayan Petrochemicals, which controls 20% of the com-pany, while 45% of Kayan is listed on the Tadawul.
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Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
10
SABIC ups investment in ME researchSaudi Basic Industries Corpora-tion (SABIC) has announced that it has provided annual research funding to Umm Al-Qura Uni-versity. This support represents part of SABIC’s wider program to enrich Saudi Arabia’s research and technology capabilities and will see collaboration with sev-eral other fl agship universities in the coming times.
SABIC’s growing relationship with Umm Al-Qura University, which is located in the Holy City of Makkah, will address a number of the country’s rel-evant industrial research needs and will help achieve technology advancement in a sustainable manner, through education.
Funds to support innovation in downstream sector allocated to Umm Al-Qura University
SCIENCE&TECHNOLOGY
“SABIC’s programmes to sup-port research and innovation at universities have evolved sig-nifi cantly over time and cover a wide range of areas such as chemicals, petrochemicals, met-als, fertilizers, polymers and in-dustrial catalyst applications,” said Dr. Abdulrahman Al Ubaid, SABIC’s executive vice president of technology & innovation. “These programs have now ex-panded even further to also sup-port research on safety, environ-ment, health, pollution and the recycling of industrial waste through scientifi c methods.”
“SABIC’s collaboration with Umm Al-Qura University will be essential towards building
synergies in research, educa-tion, and enterprise,” said Dr Abdulrahman Al Ubaid. “In ad-dition to harnessing science and
The research remit has been expanded to cover safety, environment and health issues.
technology to address the global challenges of our time – for the benefi t of Saudi Arabia and be-yond,” Dr Al Ubaid said.
High Voltage Authorised Person Training (offshore/onshore) Electric Power Failure: Preparation for an Emergency Maintenance of Electrical Switchgear Protection of Electrical Power Systems Live Testing on Systems up to 1000 volts AC Safe Use of Electrical Equipment in Hazardous Areas Drilling Rig Drives (SCR) course. Ross Hill/Hill Graham
In addition to a wide range of other High and Low Voltage training
Competency based Practical Training Fully equipped centres in the UK and Cyprus
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11
Flowserve nets KSA pumps contractFlowserve announced it has re-ceived fi nal approval from Saudi Aramco on a master purchase agreement to supply pumps, valves and services for the Yanbu Export Refi nery Project (YERP).
Under the terms of the cor-porate procurement agreement (CPA) established between Flowserve and Saudi Aramco, Saudi Aramco plans to make signifi cant future purchases of Flowserve pumps, valves and val-ue-added services. Flowserve said it expects to begin booking orders under the CPA later in 2010.
“Flowserve has made signifi -cant investments in the Kingdom of Saudi Arabia, including ser-vice, repair and manufacturing
Saudi Aramco orders pumps, valves and support services for Yanbu export refinery
Saudi Aramco plans to make significant future purchases of Flowserve pumps and valves.
facilities to support the oil and gas industry, and to help ensure premium service can be provided in-country,” said Tom Ferguson, president, Flow Solutions Group.
Under construction on the west coast of Saudi Arabia, YERP will be a 400 000 bpd, full-conversion refi nery being built in Yanbu In-dustrial City.
“This agreement reinforces Flowserve’s ongoing commitment to delivering valve products and services in Saudi Arabia through our local facilities,” said Tom Pa-jonas, president, Flow Control Division. “This overall Flowserve strategy is supported by the fact that the project will require a majority of the Flowserve control
valves to be produced at our new Dammam valve and actuator fa-cility, which will open in the third
quarter of 2010.” When complet-ed, the facility will be one of sev-eral Flowserve has in the region.
Yokogawa Meters & Instruments Corporation will release the AQ6370C optical spectrum analy-ser. Featuring enhanced optical performance and signal process-ing capabilities. “This new instrument will be used in research and development and manufacturing to measure the optical characteristics of optical communications equipment and components,” the company said in a press release.
The AQ6370C achieves a 76-dB stray light suppression ratio and is guaranteed by Yokogawa to achieve this level of perfor-mance, an industry fi rst. The AQ6370C also achieves a 73-dB dynamic range.
It also features a number of enhancements and succeeds our top performing and market lead-
ing AQ6370B. The AQ6370C has both standard and high perfor-mance versions. Its increased measurement accuracy and speed will help to increase measure-ment effi ciency and reduce devel-opment and production costs of operators.
The new product includes dif-ferent features and specifi cations. “The AQ6370C is the fi rst ever instrument in this industry to be guaranteed to achieve a 76-dB stray light suppression ratio,” the company said.
“Even when used in nor-mal mode (as opposed to high dynamic mode), this instrument achieves this high stray light sup-pression ratio, thereby reducing measurement time,” according to a Yokogawa spokesperson.The AQ6370C is equipped with a high
performance monochromator that can resolve an optical sig-nal with a best-in-class 0.02 nm wavelength resolution and 73-dB dynamic range.
“This improves the accuracy of optical spectrum measure-ments made with the AQ6370C by removing optical noise that
originates near a measured sig-nal,” added the source. “High-speed 0.2 second measurements at a 100 nm wavelength span are effective in measuring spectra having multiple steep peaks such as those in DWDM2 systems, as well as weak signals,” the com-pany added.
Yokogawa releases new optical spectrum analyser
The new AQ6370C optical spectrum analyser has a high performance monochromator.
ments made with the AQ6370Cby removing optical noise that
as well as weak signals,” thepany added.
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
EQUIPMENT&MACHINERY12
SALES&SHIPMENTS
Kuwait’s KUFPEC signs a deal to export fuel to EgyptKuwait Foreign Petroleum Explo-ration Company (KUFPEC) said that it has signed a deal to export gas oil and aircraft fuel to Egypt for a period of three years.
KUFPEC’s managing director for international marketing Ab-dulatif Al-Houti told KUNA the deal would be put into activation as of next January, stressing that this will help petroleum coopera-tion between Kuwait and Egypt.
KUFPEC’s branch manager in Egypt, Said Safan, affi rmed the importance of such deal to bolster bilateral relations, adding that KUFPEC was involved in other petroleum ventures in Egypt.
Established in 1981 by its par-ent company, Kuwait Petroleum Corporation (KPC), KUFPEC engaged in upstream and down-stream activities outside Kuwait, active in Africa, and Middle East.
RasGas ships first cargo to Portugal RasGas has delivered its fi rst supply of liquefi ed natural gas (LNG) into Portugal.
The spot sale cargo was deliv-ered to an affi liate of Galp Ener-gia SPGS, in Portugal, from the LNG tanker Al Deebel.
“RasGas has supplied LNG to 14 different countries and we continue to look for opportuni-ties to deepen existing relation-ships and further diversify our portfolio of customers,” said Ras-Gas marketing executive Khalid Al Kuwari.
Earlier in the year RasGas started LNG output from its mas-sive train 7 production facility. The facility has capacity to chill enough natural gas to produce 7.8 million tonnes per year (tpy) of LNG for export. Qatar started three equally large facilities last year. The trains are the largest in the world.
“RasGas currently connects the reservoirs of Qatar’s North Field to customers around the
Qatar sends LNG on single spot sale to Iberian coast marking 14th export partner to date
Qatar’s vast natural gas processing and liquification plants should be complete by the end of 2010, bringing capacity to 77mn t/y.
SABIC increases MEG prices to $880 per tonneSaudi Arabia Basic Industries Cor-poration (SABIC) has increased Asian Contract Prices (ACP) of mono ethylene glycol (MEG) for September at US$880 per tonne.
MEGlobal has nominated its September contract price for MEG for Asia at $870/mt levels.
MEG contract prices argener-ally set by the three major players of the industry, which includes SABIC, MEGlobal and Shell Chemicals Company.
world via seven LNG trains, 27 long-term chartered ships in-cluding Q-Flex and Q-Max LNG carriers and access to regas ter-
as a globally trusted supplier of LNG, and builds on our reputa-tion for operational and contract fl exibility,” he concluded.
SABIC is the largest MEG pro-ducer in the world, with a produc-tion capacity exceeding 5.345 mil-lion t/y, through its 10 production units located in Al Jubail Indus-trial City and in Yanbu.
SABIC signed a deal last year with a Dutch storage and termi-nal operator to rent MEG storage tanks at the port of Zhanjiagang, East China, as it aims to improve delivery of the products to end us-ers, and reduce shipment delays.
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
13
1176
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Natural gas is one of the most important energy sources. Presently, one quarter of the world’s energy demand is supplied by natural gas which is predominantly trans-ported via pipeline. However, rising demand combined with waning reserves calls for the exploration of new natural gas sources. Given in most instances the remote location of new sources, transport is frequently only possible by ship.
As a consequence, LNG (liquefi ed natural gas) is becoming an increasingly important transport option. Although LNG is a very clean energy source, liquefaction requires refrigeration to a temperature of –160° C before transport is possible. In this condi-tion, the gas has only 1/600 of its original volume and can be transported more economically. To ensure the cleanest possible energy source the natural gas can be purifi ed using Lurgi’s Omnisulf® process prior to liquefaction. This process involves a combination of various technologies designed to meet even the most stringent purity requirements. Contact us and we will be pleased to deliver a solution tailored to your specifi c needs. Visit us at Stand 11520
Dr Mohammed Yousef Al-Mulla, board
director and managing director of Qapco.
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
15QAPCO Exclusive Interview
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
UP AND RUNNING Dr Mohammed Yousef Al-Mulla, managing director of Qapco says that newly inaugurated projects will enhance Qapco’s position as a major petrochemical player in the Middle East
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
QAPCO Exclusive Interview16
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
The Qapco cracker unit and polyethylene plant is located at Mesaieed industrial city in Qatar, about 40Km south of Doha, sits at the heart of the nation’s petrochemical ambitions.
Gas (SAG) and Ethane Rich Gas (ERG). “Qapco receives enough ethane feedstock for the production of ethylene and polyolefi n’s. Thanks to the huge reservoir of natural gas available in the North Field, looking to the future, we do not expect any shortfall in the feed supply,” explains Dr. Al-Mulla.
The current progress on North Field natural gas development projects at Ras Laffan, including the Dolphin project; Al Khaleej EGU project (AKG), GTL projects and
Qatar Petrochemical Company (Qapco) is enjoying many benefi ts that allow it to be one of the major players in the Middle East, taking
advantage of the easy access to feedstock and governmental support. This has helped the company complete major expansion projects to boost its market position.
State-owned Qatar Petroleum (QP) has the responsibility for distributing feed-gas to various consumers in Qatar, of which Qapco is one of the customers. “The ethane feedstock to Qapco is currently sourced from onshore oilfi elds and the giant north gas fi eld sources, through three NGL plants, NGL-1,2 and NGL-4,” Dr Mohammed Yousef Al-Mulla, board director and managing director of Qapco, tells Refi ning and Petrochemicals Middle East.
Qapco’s gas processing facilities consist of recovering ethane from Stripped Associated
“THE LDPE-3 PROJECT IS NOW UNDERWAY, AND IT IS FORECASTED TO BE COMPLETED BY END OF 2011. AFTER COMPLETION OF THIS PROJECT, THE QAPCO’S TOTAL LDPE PRODUCTION CAPACITY WILL BE INCREASED UP TO 700 000 T/Y” MOHAMMED YOUSEF AL-MULLA, MANAGING DIRECTOR, QAPCO
NGL plants means there is plenty of ethane available for Qatar’s downstream and petrochemical industries.
“Our current design production capacity of ethylene and low density poly ethylene (LDPE) is 720 000 t/y and 400 000 t/y respectively, though we are able to produce higher than the design with ethylene at about 800 000 t/y and LDPE 405 000-410 000 t/y,” says Dr. Al-Mulla. The company has completed its expansion plans successfully,
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
17QAPCO Exclusive Interview
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
Mohammed Yousef Al-Mulla is the
managing director at Qapco.
Qapco’s current production capacity of ethylene and low density polyethylene is 720 000 t/y and 400 000 t/y respectively.
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
QAPCO Exclusive Interview18
including the Qatofi n project which produces linear low density polyethylene (LLDPE).
The Qatofi n project was inaugurated on 24th November 2009, and started up production of low linear density polyethylene (LLDPE), with a designed capacity of 450 000 t/y.
Qapco is the major shareholder of Qatofi n as it controls 63% of the company, while Total Petrochemicals of France holds 36% with QP controlling 1%.
Qapco has also started up the Ras Laffan Ethane Cracker (RLEC). “RLEC started up on 31 March, 2010 and produces some amount of ethylene,” Al-Mulla says. “As is the case with new plants, we have initial issues, which we hope to sort out very soon,” he adds.
RLEC is a joint venture between Qatofi n which holds 45.7%, Q-Chem II controlling 53.3% and QP holding 1% in the project.
RLEC is expected to produce 1.3million t/y of ethylene, expandable to 1.6 million t/y. About 700 000 t/y of the produced ethylene will be allocated to Q-Chem II and 600 000 mtpa to Qatofi n.
RLEC crack ethane is supplied from Al Khaleej and Dolphin gas projects to feed the
“QAPCO’S TOTAL LDPE PRODUCTION CAPACITY WILL BE INCREASED UP TO
700 000 T/Y WHEN COMPLETING THE EXPANSION”
DR. MOHAMMED YOUSEF AL-MULLA, MANAGING DIRECTOR, QAPCO
sponsor’s downstream derivative units. The ethylene produced by RLEC is transported to Messaeed via a 120-kilometre pipeline to feed Q-Chem and Qapco projects in Messaeed.
Qapco has invested more than $1 billion to execute these two projects. “The total estimated budget allocated for Qatofin
and RLEC is about $1.35 billion,” Dr.Al-Mulla reveals.
The company is also expanding its LDPE project, as it aims to almost double its capacity. Al-Mulla says that the LDPE-3 project is underway and
it is expected to be completed by the end of 2011. “After completion of
this project, Qapco’s total LDPE production capacity will be
increased up to 700 000 t/y,” Dr Al-Mulla says.
Following the start up of its Qatofi n and RLEC
projects, Qatofin exported the first ethylene shipment from the Ras Laffan Olefins Company (RLOC) on 30 June 2010. The first shipment contained 4 500 metric tonnes of ethylene, and was shipped by NORGAS, the ethylene shipping contractor.
The company serves clients around the world, through a well established marketing network. “Our global marketing network stretches to most strategic markets in the Middle East, Asia, Far East and Europe,” says Al-Mulla. “Now, we have faster access to over 4 500 customers in about 85 countries worldwide as we opened 26 self operated offices and five regional warehouses,” he says.
“Our goals are to establish a global marketing network that includes operating new offices and warehouses across different global territories, thereby offering our services.” he concludes.
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Iraq Country Profi le20
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
20
Iraq’s government has launched a massive investment drive to boost its domestic refi ning capacity. However, more needs to be done to attract international capital, writes Abdelghani Henni
RISING FROM THE ASHES
21Iraq Country Profi le
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
21
HISTORICAL DEVELOPMENT
Year Location
1927 capacity 10 000b/d Alwand
1949, 6000b/d Haditha
1953, 4000b/d Al-Muftiya
1955 Daura
1972 Basra
1982 Baiji
A view of the Shuaiba oil refi nery near the port
of Basra, 550 km south of the capital Baghdad.
Iraq was among the fi rst countries to establish a refi nery in the Middle East, building the fi rst refi nery at Alwand in 1927 with a capacity of 10 000b/d. This
was followed by the construction of the 6000 b/d Haditha refi nery in 1949, later expanded by 10 000 b/d. However, it failed to keep its leadership position due to political instability and a series of wars in the past 32 years, dating back to the Iraqi-Iranian war in 1978 and including 13 years of embargo.
Saadallah Al Fathi, who has worked throughout various departments of the Ministry of Oil in Iraq and became director general of the Daura refi nery (1976-1980), and president of the Refi neries and Gas Industry Administration (1980-1986), told Refi ning and Petrochemicals Middle East that much of the damage from the Iran-Iraq war has never been repaired. “Refi neries in Iraq suffered through three wars and 13 years of sanctions,” says Al Fathi, who currently works as an advisor to Dome International Petroleum. “The repairs were modest and very little fresh investment was made,” says Al Fathi.
Iraq has three main refi neries including Baiji in the north, Daura near Baghdad and Basra in the south, with combined capacity of about 570 000 b/d.
The majority of these refi neries are hydroskimming refi neries, one of the simplest process types but also the least effi cient, consisting of atmospheric distillation, naphtha reforming and treating processes, as opposed to the
high olefi n fl uid catalyst cracking (HOFCC), and FCC refi neries.
There are also smaller regional distillation units with Merox treaters which treat LPG, kerosene or jet fuel by oxidizing mercaptans to organic disulfi des. “Beside these refi neries, lube oils production continues in three major refi neries, based on furfural extraction and MEK dewaxing,” explains Al Fathi. “Tetraethyl lead (TEL) is still used to boost octane,” he explains. TEL is a common antiknock additive/octane booster in gasoline (petrol). TEL usage was largely discontinued in Europe and North America because of the toxicity of lead and its deleterious effect on catalytic converters.
The need for improvement is underlined by the EIA. “Iraqi refi neries, with a maximum capacity of almost 600 000 b/d, have antiquated infrastructure, and their output does not refl ect the current demand mix,” said a recent EIA report on Iraq. “Despite improvements in recent years, the sector has not been able to meet domestic demand for most refi ned products, and the refi neries produce too much heavy fuel oil,” it read. The result is that Iraq relies on imports for about 25%
of the petroleum products it uses, with total consumption averaging about 600 000 b/d in 2008.
Many other factors have affected the refi ning sectors in Iraq, including the lack of continuously power supply which prevents normal operation of the refi neries. “Looting and pillage in the aftermath of the 2003 invasion and occupation, diffi culties in the export of fuel oil products also hampers the operations, along with the lack of a strong central coordinating authority in the country,” Al Fathi explains.
The refi ning sector in Iraq also suffers from the continuation of outdated control mechanisms, with no supervisory body in place. In addition, the quality of gasoline is poor, as the it is leaded and has low octane
“IRAQ HAS PLANS FOR FIVE NEW REFINERIES, AS WELL AS PLANS FOR EXPANDING THE EXISTING DAURA AND BASRA AND BIAJI REFINERIES” IMAD NASSIF MAKKI, OIL REFINING SENIOR EXPERT, OAPEC
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Iraq Country Profi le22
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Imad Nassif Makki, senior oil refi ning expert at the Organization of Arab Petroleum Exporting Countries (OAPEC).
level, while diesel and oil have a high sulfur content. Moreover, the sector is not adept at conserving energy and observing environmental compliance. “Iraqi refi neries suffer from poor utilisation rates, says Al Fathi. “In recent years, the rate of utilisation has not been more than 50- 60%.”
Strategic planTo alleviate product shortages, Iraq’s 10-year strategic plan for 2008-17 aims at increasing refi ning capacity from 600 000 b/d to 1.5 million b/d. “Iraq has plans for fi ve new refi neries, as well as plans for expanding the existing Daura, Basra and Biaji refi neries,” says Imad Nassif Makki, oil refi ning senior expert at the Organization of Arab Petroleum Exporting Countries.
The scope of work involved in rehabilitating the existing refi neries includes the power generation and integration of steam requirements for all refi neries as well as increasing the conversion ratio and overall complexity. “There could be additional units to further improve yields and product specifi cations,” Al Fathi says. “It also aims to maintain, rehabilitate and modernise existing refi neries including the control systems,” adds the expert.
The Iraqi government has revealed plans to build fi ve new refi neries in the country. “The new refi neries will add 840 000bpd, and will be located in Karbala (140 000 bpd), Nassiriyah (300 000 bpd), Kirkuk (150 000 bpd), Maysan (150 000 bpd) and East Bagdad with a capacity of (100 000bpd),” says Makki.
Referring to facilities at Karbala, Kirkuk, Maysan, and Nassiriyah, Iraq’s Oil Minister Hussain Al-Shahristani said that “the
Feedstock storage facilities at the Iraqi oil refi nery of al-Zubair, 30 kilometres south of the southern port city of Basra.
Saadallah Al Fathi, advisor at Dome International Petroleum, and ex-president of Iraq’s Refi neries & Gas Industry Administration.
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Iraq Country Profi le24
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
investment in the new refi neries will be around US$20 billion. Each one will cost around $4 billion.”
The building of new refi neries around the world has slowed dramatically, and sometimes banned due to environmental legislation. But in Iraq, nothing will stop the government from executing such projects. “Refi nery investments in Iraq are guaranteed more than anywhere else in the world,” said Al-Shahristani in early July, adding that his country wants “real partners.”
“With the planned new refi neries, Iraq has a leading position in the region’s downstream capacity development,” says Yassir Ghiyati, sales manager at Haldor Topsoe, which is involved in refi ning projects in Iraq.
The country has recently awarded several contracts in connection with the development of its new refi neries. The Shaw Group has been awarded two feasibility study contracts in connection with the development of the 150 000b/d Kirkuk refi nery and the 150 000 b/d Misan refi nery. Technip from France is undertaking the front end engineering and design (FEED) work of the 150 000b/d Karbala refi nery.
Foster Wheeler won the feasibility study for the 300 000b/d Nasiriya refi nery. “We will develop the confi guration of the new refi nery to meet the client’s processing objectives, evaluate proprietary technologies, prepare a report covering the feasibility of the project and the design basis of the refi nery facilities, engage the selected licensors and prepare the front-end engineering design package for the total project,” explains Stephen Culshaw, managing director, Commercial Operations, Foster Wheeler Energy Limited and a founder member of the Iraq Britain Business Council.
To secure the necessary funds to fi nance these projects, Iraq is considering different options, which include direct governmental allocations as well as establishing joint
One of Iraq’s ageing oil refi neries situated on the outskirts of Kirkuk. The region has proved a relatively safe operating environment, and is earmarked as one of the primary upgrade candidates.
Stephen Culshaw,
Managing Director,
commercial
operations,
Foster
Wheeler
Energy.
Getty Images
25Iraq Country Profi le
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
The budget Iraqi government intends to invest to upgrade and build new refi neries in different parts of Iraq
$20bn
ventures. In an effort to attract investment, Al-Shahristani said Iraq will allow investors to set prices for refi ned products, as well as offering a 5% discount on oil and on the land on which the refi neries are to be built.
“There hasn’t been much success in the last few years in getting direct allocations from the ministry budget,” says Al-Fathi. “Now the government has proposed a new private investment law to encourage private companies to invest in Iraq’s downstream sector,” he adds.
The private investment law also offers a forty year lease on land, and allows the investor to market the products in and out of Iraq, but with priority provisions for the ministry to buy the product.
In order to qualify for government incentives, Iraqi and foreign companies
“NOW THE GOVERNMENT HAS PROPOSED A NEW PRIVATE INVESTMENT LAW TO ENCOURAGE PRIVATE COMPANIES TO INVEST IN IRAQ’S DOWNSTREAM SECTOR” SAADALLAH AL FATHI, ADVISOR AT DOME INTERNATIONAL PETROLEUM
interested in the refi ning sector must posses proven fi nancial and technical capabilities, and 75% of staff should be Iraqi nationals.
But even with these incentives, analysts say that the law needs to contain more to attract the required investment needed. “The private investment law must be made more realistic to attract any interest,”
observes Al-Fathi. “Refi neries must be planned with economic considerations in mind and not the wishes of political groups.”
In spite of the criticism from Iraqi experts, these proposed projects will open great opportunities for engineering and licensing companies in the revitalisation and expansion of Iraq’s refi neries.
“The Iraqi oil market is currently undergoing a huge fast track development programme, and this offers excellent opportunities for technology and catalyst companies.” says Ghiyati.
The same view is shared by Foster Wheeler. “We fi rst worked in Iraq in the 1930s,” says Culshaw. “We see Iraq as a very important marketplace for Foster Wheeler, and one to which our particular expertise and track record in executing large, complex projects in challenging locations make us particularly well-suited. Security is of course a concern and this is regularly reviewed.”
However, due to the current political and security situation in Iraq, executing these proposed projects seems to be very diffi cult. “Above all, Iraq must get out of its current predicament and regain real independence,” says Al Fathi. “Otherwise, even the best intentions will not be good enough.”
A coalition force helicopter fl ies past a fl ared gas from the tower of a refi nery near Baghdad. Yassir Ghiyati, sales manager at Haldor Topsoe, which is involved in refi ning project in Iraq.
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Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
27Air Liquide
Air Liquide invested $80 million in Kuwait
building an oxygen plant for Equate.
CRACKING MOLECULESIncreased downstream activity in the region has created major business opportunities for service companies, says Jacques de Thezy, CEO of Air Liquide in the Middle East
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Air Liquide2828
Jacques de Thezy, CEO
Air Liquide MENA.
Oman, UAE and KSA,” says the CEO. The company has established a production facility in each country. “Because our product can’t be transported, we have a production facility in every country,” he adds.
While feedstock cost advantage is the main motive of investment for international petrochemical producers in the region, Air Liquide’s business model doesn’t rely solely on this as it uses air as the feedstock. “We process the air to different gases through a distillation process and then separate the different molecules before supplying it. For hydrogen or carbon monoxide, we need a feedstock which is natural gas, naphtha or LPG, as it should be hydrocarbon based.”
De Thezy says that the products are sold locally due to diffi culty in transportation. Commenting on this, de Thezy says: “We don’t make money out of the difference between the feedstock and the end product.”
Though it is a newcomer to the region, Air Liquide has scooped several contracts with major downstream players in the regions. “In Kuwait we invested US$80million to build an oxygen plant as we have signed a 20 year contract with Equate Petrochemical to supply the company with oxygen,” says the CEO.
In Qatar, the company won a contract to build the world’s largest helium unit. “It is a double award contract, one related to the technology and the second is about the product off take,” says de Thezy. “You need very specifi c know-how to liquefy the helium, which naturally comes with natural gas.”
The new helium facility will have a production capacity of 83 million cubic metres of helium per year. “The technology used to purify and liquefy helium at very low temperature (-269o C) is a propriety Air Liquide advanced technology,” he adds.
Air Liquide was awarded the EPC segment for the $500 million contract, and is expected to award the subcontract soon.
Processing feedstock requires an array of specialised reactors, which include catalysts, oxidants and different industrial gases to break
the links between the hydrocarbon molecules of the feed.
Air Liquide is one of the major providers of industrial gases to downstream producers. “We serve many industries including the petrochemical and refi ning sectors,” says Jacques de Thezy, chief
executive offi cer of Air Liquide in the Middle East and North Africa.
“Most of the time industrial gases are used as process gases, for example, carbon monoxide is one of the molecules that we use, along with oxygen which is used to oxidise ethylene, hydrogen is used in the process of refi ning,” he says. “These industrial gases are at the heart of the process,” he adds.
The company supplies its products to different petrochemical companies in the
region. “We supply oxygen to Equate Petrochemical in Kuwait, carbon
monoxide to Sipchem’s acetic acid plant in Saudi Arabia
and nitrogen to the Sohar refi nery in Oman,” Thezy
explains. The company has a
presence in much of the GCC region. “Within three years, we have established a presence in
Qatar, Kuwait,
Air Liquide delivers 85% of its gas products through pipelines or on site
facilities to its customers.
85% “THE MAIN CHALLENGE WE FACE HERE IN THE MIDDLE
EAST IS THE SHORTAGE OF SKILLED PEOPLE”
JACQUES DE THEZY, CEO AIR LIQUIDE, MENA
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Air Liquide30
Air Liquide’s Middle
East business strategy
hinges on creating
production facilities
in industrial zones or
downstream clusters.
production facility and then we lay down a pipeline to supply all our customers in the same area,” he explains.
Air Liquide has 100% ownership of the majority of its projects in the region, and rarely goes into joint venture with locals as is the case with major global petrochemical companies. “In most of the cases, we entirely own our projects,” says de Thezy. Most advanced chemicals and petrochemicals fi rms looking to grow their business in the Middle East are faced with the stark reality of having to mine a select pool of qualifi ed, able and talented recruits, as well as enticing new blood into the industry.
“It is true, the main challenge we face here in the Middle East is the shortage of skilled people,” says de Thezy. “We are still growing here in the region mainly thanks to the petrochemicals industry, and our related CO2 business is also expanding too,” he colncludes.
Air Liquide also signed an off-take agreement with RasGas and QatarGas. “We signed a 50% off-take agreement with the project owners,” says de Thezy. “Helium is one of the rare products that we ship to consumers in India, Japan and China, for different industrial purposes including in electronics or hospitals,” he explains. “The project is on track and expected to go on stream by 2013 in Ras Laffan,” he adds.
To sell the product to the international market, the company will transport the product from Qatar to the UAE ready for global transhipment. “We will ship the helium from Jebel Ali port, using a fl eet of containers,” he adds.
The company’s business model is based on creating a production facility in the industrial zones of each country, and then set up pipelines for different clients. “In every country, we set up our plants in the industrial zones, like in Sohar, Oman; Shuaiba, Kuwait; Mesaieed, Ras Laffan in Qatar or Jubail in Saudi Arabia, we set up a
of Air Liquide’s revenue comes from gas applications which preserve life and the
environment
36%
Laboratory Equipment32
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
32
In downstream facilities the presence of testing labs is critical to ensure the quality of end products, RPME investigates regional labs, testing capbilities and equipment ranges
INSIDE THE LABORATORY
In the petrochemicals and refi ning industry plant operators need to ensure the quality of their products, as well as its conformity to the international
standards. To ensure these standards are met
all major downstream producers’ have laboratories in-house to make the necessary tests and analysis.
In refi neries and petrochemical plants the laboratory will mainly concentrate on testing
the in-process samples and fi nal products. “Quality control is one of the most important functions within any refi nery or petrochemical plant,” says Dr. Hans-Friedrich Enderle, manager for physical and
Typical analyses includes checking of chemical and physical properties of feedstocks and end-products. Laboratory operators use a variety of equipment and instruments to perform these tests.
Intertek is a regional leader in the development and early adoption of advanced testing techniques.
33Laboratory Equipment
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
determined in stages through gas chromatography mass spectrometry (GC-MS) which identifi es specifi c compounds,” explains Parameswaran.
Batches of the fi nished product are certifi ed according to the results of tests conducted against the complete specifi cation for the product. “Product specifi cations depend on customer requirements and can vary from country to country. As an example, for gasoline, the test requirements include distillation, density, sulphur, aromatics and olefi ns, oxygenates, and mercaptan sulphur,” says Parameswaran. “Whereas jet fuels used in aircrafts, the tests would include density, distillation, freeze point, conductivity, and lubricity,” he explains.
While the majority of the analysis can be done in a normal laboratory environment,
mechanical application testing at LyondellBasell’s Hoechst Industrial Park, in Frankfurt, Germany. “To ensure the best quality, we undertake both mechanical and chemicals tests,” he explains.
Every laboratory usually performs the analysis of feed, intermediate and fi nal products of the plant. “Typical analyses includes checking of chemical and physical properties such as sulphur content, water content, trace impurities like oxygenates or inert gases, metals content, fl ash point, vapour pressure, octane number and so on,” says Raj Makhamale, marketing manager at the Dubai based Gulf Bio Analytic Company.
In a refi nery, the main tests are based on the products cut in the distillation or cracker units. “The tests vary from density, fl ash point, vapour pressure, viscosity, and pour point to “high-end” analysis such as distillation, PIONA, carbon residue, and cold properties, for example,” says Ravi Parameswaran, Middle East laboratories manager, based at Intertek’s Sharjah operation.
For the production of petrochemical products, the intermediate analyses mainly assess the process conditions and the product formulation. “Composition of the product is
“PRODUCT SPECIFICATIONS DEPEND ON CUSTOMER REQUIREMENTS AND CAN VARY FROM COUNTRY TO COUNTRY. FOR GASOLINE, TEST REQUIREMENTS INCLUDE DISTILLATION, DENSITY, SULPHUR, AROMATICS” RAVI PARAMESWARAN, MIDDLE EAST LABORATORIES MANAGER AT INTERTEK
Raj Makhamale, manager at Gulf Bio Analytic. Company.
NTRY. FOR GASOLINE, CLUDE DISTILLATION, MATICS”BORATORIES MANAGER AT INTERTEK
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Laboratory Equipment34
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
A laboratory operator performing chemicals tests at the Intertek facility in Sharjah, UAE.
there are exceptions. “Some special testing is done inside a fume chamber to ensure that dangerous fumes are exhausted out. Typically, the plant will have its own internal protocols for the feed and intermediates and a second set of protocols for the fi nal product which is similar to that desired by the buyer of the products,” says Makhamale.
All tests are conducted within a set of prescribed conditions. “Generally, a
laboratory follows internationally approved procedures such as ASTM, IP, UOP, BS, and AASHTO for conducting the tests,” says Parameswaran. Some of the process analysis procedures are also developed by licensors such as UOP, or companies such as BP or Shell. “These methods are developed and validated by the issuing authority based on their research, validation and “round robin” test data collated during tests that have been conducted,” Parameswaran adds.
In order to perform these tests, laboratory operators use different types of equipment. Mechanical equipment is used to measure physical properties of petrochemical or petroleum products; the chemical properties are used to identify contaminants or the composition of the mixture. “Instruments used for analysis are gas chromatographs, inductively coupled plasma, mass spectrometers, X-Ray fl uorescence, FTIR, UV-VIS, distillation units, fl ash point testers, viscosity meters, HPLC or Ion chromatographs and many more equipment,” says Makhamale.
The selection of the laboratory equipment depends on the tests it has to perform and the test method that will be used; this often depends on the composition of the sample. “As the test methods and the product composition differ, the equipments used for the analysis will also differ,” says Parameswaran. “Some equipment used in
the testing, such as density meters and gas chromatographs, can accommodate several test methods and can be modifi ed, or fi ne-tuned, to meet the test conditions of the sample. Accordingly, the equipment can be used in refi neries and petrochemical plants,” Parameswaran explains.
These are critical instruments for producing accurate, reproducible and reliable results. Not all manufacturers of instruments can offer solutions that are required by the downstream industry. “Wrong results can lower the price of the product or create damage to very expensive catalysts used in the process. This loss can run into millions of dollars,” says Makhamale. In order to avoid these loses, the buyer of laboratory equipment has to have a good understanding of the test method to be employed, along with other key factors such as safety considerations, limits of detection, frequency of the analyses, and the laboratory set-up according to the new test requirements. “Armed with the answers to these questions, the buyer should be looking for brand name, quality of the equipment, supporting test methods, such as ASTM, UOP and IP, buyer’s relationship with the manufacturer many other factors,” says Parameswaran.
“Based on this information the buyer can assess the options and, according to budget, decide on the right equipment,” concludes Parameswaran.
Gulf Bio Analytical group sales director Zoeb Merchant and Raj Makhamle, marketing manager.
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Tech Focus36
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Technology Focus3636
Introducing RFID solutions to downstream operations can make a huge difference to staff safety according to Mike Meranda, CEO of Tagstone
The solutions Tagstone offers can be used in different phases of production, from personnel tracking and safety to optimising production, asset tracking to equipment maintenance to product transportation and distribution phases.
“RFID can be used in the exploration and production stage, the refi ning process, in transportation and distribution, and in personnel management processes,” he explains. “One of the key solutions that we can provide to downstream companies is the ability to quickly locate workers, particularly in emergency situations,” explains Meranda.
Though the company offers many solutions for clients in the Middle East, it does not yet manufacture locally. “We don’t have a production facility here in the Middle East,” says Meranda. “What we do is identify the best in class technology around the world and then we import it here and implement it. We work with a number of clients in the upstream
With activity levels ramping up again in the downstream sector across the Middle East, plant operators are continuing to
introduce new technologies to increase operational and production effi ciency, as well as reducing costs and improving worker safety. Given this backdrop, many service providers have fl ocked to the region to present their cutting edge solutions and technologies.
The offerings of these service companies differ, but their main objective is to get a slice of the multi billion US dollar downstream projects. “We offer our clients with many intelligence solutions to help them reaching their objectives in operating safely and effi ciently,” says Mike Meranda, chief executive offi cer at the Dubai based Tagstone. The company offers several technologies using Radio-frequency identifi cation (RFID), biometrics, CCTV, GPS, and many other intelligent solutions that help operators run plants more safely. Mike Meranda, CEO of Tagstone
PLAYING TAG
37Technology Focus
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
“OUR TAGSECURE SOLUTION CAN PLAY AN IMPORTANT ROLE IN INCREASING OPERATIONAL AND PRODUCTION EFFICIENCY, REDUCING COSTS AND IMPROVING SAFETY”MIKE MERANDA, CEO OF TAGSTONE
www.arabianoilandgas.com
Ganesh Pattabhiraman, services direct at Emerson.
and the downstream sectors, including the ADNOC group of companies,” he says.
The company’s involvement in different industrial sectors helped it to develop specialised solutions for different process industries. “With experience in the automotive, oil and gas, and downstream industries, we have special insights into the particular challenges faced by regional organisations, which help us to develop solutions that help the improvement of the business process,” he explains.
One of the key application of Tagstone’s solution is in the supply chain, which tends to be highly labour-intensive and costly. “The instant visibility provided by RFID enables companies to streamline delivery operations, minimise costly vehicle and driver downtime, and optimise asset performances,” says Meranda.
“Using such fl eet management solutions, oil companies can not only save time and money, but also track the delivery and movement of their crude oil or refi ned goods tankers,” he adds.
Tagstone’s technology is based on wireless solutions which run autonomously, making it attractive to companies in the industry which run various dangerous processes.
“Our technology is completely automatic and wireless,” the CEO says. “Our TagSECURE solution can play an important role in increasing operational and production effi ciency, reducing costs and improving worker safety. The tracking of people and objects, coupled with the RFID tags’ ability to withstand harsh conditions make this technology suitable to use throughout the downstream sector,” Meranda explains.
As the company’s solutions are deployed in different environments, there are associated challenges explains Meranda.
“The key technological challenge we face with refi nery and petrochemicals plants is that various technologies have to be carefully tuned to fi t the environment where there is heavy metal content or heavy liquid content,” says Meranda. “Metals tend to refl ect radio frequency, while liquids tend to absorb it,” Meranda says.
Regardless of these issues, Meranda very much believes simplicity of implementation and utilisation is the key. The volume of steel in refi ning plants can pose challenges to standard RFID systems, but careful tuning can overcome this.
Radio frequency identifi cation tags can be carefully tuned to work in heavy metal and heavy liquid environments.
Dr Abdulwahab Al-Sadoun, secretary general of the
Gulf Petrochemical and Chemical Association.
Events Preview38
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
38
39Events Preview
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
Event: The First GPCA Fertiliser Convention
Where: Intercontinental Hotel, Dubai - United Arab Emirates
When: 28-30 September 2010Webpage: www.gpca.org.ae
Downstream industry events kick off in earnest this September, so make sure you are up to speed on what the industry has to offer
NETWORK OPPORTUNITIESW
ith the combined summer and Ramadan lull behind us, three major events and conferences are set to take place in the coming
weeks. Top spots for October and September’s schedules includes the fi rst regional fertiliser convention, the second petrochemical supply chain forum and Middle East Chemical Week.
The Gulf Petrochemical and Chemicals Association (GPCA) will inaugurate the events season, with the First GPCA Fertiliser Convention taking place on 28-30 September 2010 in Dubai.
“Adverse weather, severe droughts and fi res, particularly in Eastern Europe, has prompted a concern about the supply of commodity grain and subsequently resulted in a crop price increase, which in turn could create incremental demand for fertilisers in
The event will concentrate on fertiliser markets, focusing in particular on demand in key regions of the world, the supply of main nutrients, and key issues for food security.
A stellar panel will address technological developments in the large-scale production of nitrogen fertilizers, which are used in greater volume than any other, and are manufactured in large quantities by GPCA members and companies in the Gulf, including SABIC and MA’ADEN from Saudi Arabia, Al-Ruwais Fertiliser Company (Fertil) from Abu Dhabi, (QAFCO) in Qatar, PIC from Kuwait and GPIC from the Kingdom of Bahrain.
Petchem Arabia, held in Abu Dhabi in October last year, attracted major international players in the downstream sector. The major theme of last year’s event was refi nery integration.
Event Preview40
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Event: The Second GPCA Supply Chain ConferenceWhere: Gulf Hotel, Manama, Bahrain.When: 24th – 26th October 2010 Webpage: www.gpcasupplychain.com
Event: ADIPEC 2010Where: Abu Dhabi Exhibition Centre, Abu Dhabi - United Arab Emirates When: 1st- 4th November 2010Webpage: www.adipec.com
Event: The Middle East Chemical Week (MECW)
Where: The Gulf Hotel, Manama, Kingdom of Bahrain
When: 10th – 13th October 2010 Webpage: www.wraconferences.com
the short to mid-term future. Given these market conditions, the GPCA is organising this event to address the supply-demand balance and the role the GCC could play to meeting the future demand for fertiliser in global markets,” said Dr Abdulwahab Al-Sadoun, secretary general of the GPCA. “The conference will bring together the regional industry leaders, their customers and service providers to discuss issues surrounding fertiliser demand trends and recent technological production process advancement as well as highlight optimal fertiliser application to ensure higher crop yields,” he added.
In addition, the GPCA is hosting the second GPCA Supply Chain Conference, which will be held between 24th and 26th October 2010 in the Kingdom of Bahrain. As the only Middle East supply chain event presented by the industry, for the industry, this year’s GPCA Supply Chain Conference again brings together leaders from across the Gulf, under the theme “Serving Vibrant Global Markets: Implications for Gulf Supply Chain Management.”
The conference is organised under the patronage of Abdulhussain Mirza Oil and Gas Affairs Minister, and chairman National Oil and Gas Authority (NOGA), Bahrain. The
conference will provide a platform for Middle East and global participants in the chemical industry to exchange ideas and best practices in an age of fast-changing industry dynamics and increasingly exacting social accountability.
“Between 2009 and 2015, the GCC members will increase their production capacity by 70%, adding 51.6million tonne to its annual capacity. During the same period, GCC exports will increase by 50%, from 38.2 million tonne in 2009 to 57.2million tonne in 2015, an increase averaging 10% per annum. Managing the signifi cant increase in export volume and managing hazards are the key challenges,” said Al-Sadoun.
“The second GPCA Supply Chain Conference will address the supply and demand in the GCC for all specifi ed shipping modes, the GCC port and the different shipping modes highlighting key
challenges and opportunities in this sector,” Al-Sadoun explained.
In October, The World Refi ning Association decided to incorporate the 5th Annual Petchem Arabia Conference and 3rd Annual Middle East Fertilizer Symposium, under one brand name called The Middle East Chemical Week (MECW), which will held between the 10th and 13th of October in Bahrain. The MECW offers the opportunity for investors, petrochemical and fertilizer producers, NOCs, IOCs, technology and solution providers and governments to identify sustainable solutions to the global challenges facing the petrochemicals and fertilizers industries.
A second raft of events take place in November and December, including the region’s largest energy and downstream related event, ADIPEC 2010, in Abu Dhabi, two events in Istanbul, namely Iraq Mega Projects and Iraq 2010. The year rounds off with the GPCA Forum and the Refi ning Technology Conference, which will be held in Dubai and Abu Dhabi respectively.
The events organised by the GPCA attract major industry players and experts who want to network with industry peers.
41HSE Focus
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
Avon Protection to launch sulphur dioxide protection hood to Middle East customers at ADIPEC 2010
Due to the long distance toxic effect of a potential sour gas and sulphur dioxide release, it is essential that production and construction site
workers in the oil and gas industry have respiratory protective equipment available to them at all times. With this in mind Avon Protection, a part of Avon Rubber, has developed the world’s most compact NIOSH certifi ed HS Filter Escape Hood, which has been designed to protect individuals in their safe escape from a toxic emergency, and will be on show for the fi rst time at ADIPEC between 1-4 November.
Avon’s NH15 Filter Escape Hood has been designed to meet the latest oil and gas industry safety challenge time standards of 100 minutes protection at an on-site HS concentration level of 5 000ppm. It is quick and easy to use – from opening the packaging through to donning the hood, the wearer can be safe in less than 30 seconds. Once donned, the NH15 provides the user with a wide and clear view of the scene, as well as the ability to easily recognise and communicate with colleagues. In areas of high humidity, it has been designed to minimise condensation and fogging levels within the hood – very important if you are in the midst of an emergency.
Further benefi ts the NH15 has over other respiratory protection include it being able to fi t all head sizes, plus it can accommodate all facial features such as beards, turbans and long hair as well as equipment such as spectacles and goggles. It is compact and lightweight, and can be carried round on a utility belt or stored in confi ned spaces. Finally, it has a fi ve year zero inspection and maintenance shelf life. All of this combines to make the NH15 Emergency Hood one of the safest, most cost effi cient pieces of respiratory equipment available to the oil and gas industry.
Steve Windley, Avon Protection’s Regional Sales Manager to the Middle East, explains: “Here at Avon Protection, we have been working with leading HSE providers in the Middle East to design the most compact HOS/SO fi lter escape hood which meets the oil and gas industry’s latest safety challenge times for high ppm levels of toxic gases that would be present during a rig or refi nery emergency.”
BREATH EASY BREATH EASY WITH NEW WITH NEW ESCAPE HOODESCAPE HOOD
The new NH15 Filter Escape will be launched at ADIPEC.
Middle East product debut:
ADIPEC
Market Survey: Pumps42
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
42
New investment and upgrading of existing petrochemical and refi ning projects in the Middle East are driving a substantial
portion of the industrial pumps market in the region.
Rising demand for compressors and vacuum pumps in particular, as well as increased use of customised products for greater automation and integration of production processes are some of the key factors contributing to market growth.
This has led leading pump suppliers and manufacturers to more aggressively target their offering to meet downstream operators’ needs. Key markets in the Saudi Arabia, UAE, Qatar, and Kuwait are driving
A dynamic downstream scene has led pump manufacturers and service providers to align regional strategies to meet the needs of refi ning and petrochemical producers
PUMP ACTIONregional growth for the multi-billion dollar pumps industry, which has picked up some of the slack caused the global recessionary environment. Multinational companies such as GE Oil & Gas have established a major a fi eld offi ce presence of some of these promising markets, and has found that proximity pays dividends in this increasingly cost-driven industry.
Pump providers not traditionally associated with the industry are subsequently going out of their way to get a slice of the market’s growth potential. Some of the newcomers to the region have opened engineering and manufacturing shops, and they are making efforts to diversify their coverage to include more industrial sectors.
43Market Survey: Pumps
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
Sample shot of one of GE’s oil and gas pumps.
Anticipating a future surge in demand in the Middle East’s rapidly growing pumps market is defi nitely the name of the game for GE Oil & Gas. The company’s Pumps & Valves platform manager for turbomachinery, Emanuele Santo, is a fi rm believer that there is much to be gained from having its commercial teams and application and fi eld service engineers in the region.
“We continue to build our local footprint and as part of our regionalisation strategy we are implementing a local organisation that will support streamlined project execution and services delivery for our entire customer base across the Middle East.”
“We have a strong backlog of sales for projects in the Middle East and over the next two years we will install almost 100 large and medium size pumps around Abu Dhabi alone,” he says.
Pump sales in 2008-2009 demonstrated a strong presence in India, North America and Africa for the company which has more than 18 000 centrifugal pumps installed around the world. But it anticipates a moderate
slowdown in the North American market with focus increasingly shifting to the Middle East, Russia and China.
“Regardless of oil and gas industry segment, the demand for pump equipment has remained strong and is projected to continue growing for a few more years especially in key regions, including the Middle East. This is mainly driven by two factors. Firstly, refi nery capacity shifting to Asia and the Middle East, and secondly, incremental reserves being more expensive,” according to Santo. “Until oil prices increase to make exploiting new reserves profi table, the focus will be on developing the enhanced oil recovery processes through water or CO2 re-injection,“ he adds.
He alludes to the tough economic climate saying that customers worldwide are having to re-evaluate project economics much more closely but that his company has a healthy backlog of projects to maintain its manufacturing and service operations.
“While the global fi nancial crisis certainly has impacted the upstream and downstream
markets, we have been able to alleviate the situation thanks to some major oil boosting projects and multiproduct shipping in the midstream market,” he says.“We are fully focused on the oil and gas industry and applied adjacencies such as carbon capture and storage, waste to energy, concentrated solar power and geothermal, as well as supplying turbomachinery equipment for industrial power generation.”
Sriram Iyer, regional manager of LEWA pumps and systems believes the current market trend is on consolidation and cost reduction. “The market has grown over the years due to the increasing business of oil and gas,” he says.
“Now that oil and gas have cut back their requirements, the fall out is a drastic reduction in the number of projects and also more cut backs in project costs.”
National oil companies and their associated EPC contractors in the UAE and Saudi Arabia form the bulk of the customers and revenue for the German company.
Iyer says that the current market is getting to be cost driven and in the long term, the company will need to look at various means to localise the production and have the advantage of being near the customer.
He says that at the moment EPCs and oil companies are reaping the benefi t of lower market demand. He adds that there is overcapacity in the region and that it would require another two to three years for demand to match with the supplies.
A lot of smaller oil and gas companies and EPC contractors are quite active in countries like Yemen, Iraq, India etc. Iyer says that previously the returns in these areas were not very attractive for these companies. With the downward trend, these areas are being more aggressively pursued for exploration and production.
Despite the rapidly changing and somewhat uncertain market conditions, Iyer is buoyant about the future for LEWA.
“For the year 2010-2011, we expect the downturn in the oil and gas industry to be
reversed by end of 2010.This is showing up in the number of budget enquires that we are receiving. So, somewhere in the middle of 2011, we expect EPC orders for pumps and other equipment in the oil and gas segment.”
GE OIL & GAS
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LEWA PUMPS
Sriram lyer, regional manager of
LEWA pumps and systems.
Market Survey: Pumps44
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
4444
Pumps are critical for refi neries and
petrochemical plants.
Japan’s Torishima Pumps Manufacturing Co. which has installed over 6 000 pumps in the Middle East, and primarily operates in the desalination sector, is looking to diversify its business in the region further by also moving into the oil and gas sector. The company’s service arm, Torishima Service Solutions which already has a manufacturing and servicing workshop in Abu Dhabi will soon be opening a brand new 10 000m2 facility in Dubai.The new facility is part of Torishima’s plan to beef up its engineering presence and service capability for its regional pump operations. The upcoming service centre in Dubai will have the capability to work over and repair pumps from any provider worldwide.
The company’s overall strategy for the region is to serve Torishima and non-Torishima customers in the Middle East. Along with the Dubai facility the company’s workshop in Abu Dhabi is to establish a foothold in the Emirate’s oil and gas sector and branch out further into the industry. ”This will serve as an excellent platform to leverage our position as both the number one supplier of pumps along with spares, repairs, service and technical support,” says John Houston, sales and business director for Torishima Service Solutions in Dubai. “The equipment and expertise will be second to none, and what we will be able to do here with a local provision will be very attractive to end-users of pump equipment,” he concludes.
TORISHIMA SERVICE SOLUTIONS
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John Houston, sales and business
director for Torishima Services Solutions.
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
45Market Survey: Pumps
An ultra high-pressure pump from Gates Engineering & Services.tra high-pressure pump from Gates Engineering & Services.
Gates Engineering & Services is an industrial pump rental and sales service. The company says that the UAE today is one of the its most thriving markets in the MENA region. Gates has regional offi ces in Saudi Arabia, Qatar, Oman and the Kingdom of Bahrain have also contributed to its overall regional revenues. Gates provides its services to a range of customers within the different industries it serves. The company provides high power (HP) and ultra high power (UHP) water jetting pumps to national oil companies, oilfi eld service providers and rig refurbishment contractors.The company’s global headquarters, is located in the Jebel Ali Free Zone in Dubai and encompasses a fully- fl edged production shop and warehouse facility,
GATES ENGINEERING & SERVICES
which the company says helps it meet operational requirements from its regional offi ces and also from branch offi ces in Australia, China, Brazil, Turkey, India and the US. Like many other companies in the current downturn, when upstream projects had a setback in terms of progress, their related industries also felt the pinch.The company’s biggest challenge in the current market is the ability to deliver on customers’ time and budgetary constraints in terms of manufacturing, supply chain and pricing structures. It is a
known fact that when oil and gas projects had a setback in terms of progress, all other related industries also felt the pinch,” the company said in a statement. The company says its long-term business strategy, which has been sharpened in the early stages of the recession as it reached out to as many customers in as many industries, is to streamline greater collaborative efforts within the pumps business by expanding its sales and rental fl eets worldwide and working with other product and service lines to provide integrated solutions to its customers.
Number Cruncher46
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
Price on July,19th (US$ per share)
Price on August,19th (US$ per share)
Change %
Saudi Basic Industries Corporation (SABIC) 23.00 22.67 -1.47
Saudi Arabian Fertilizer Company (SAFCO) 35.47 36.60 3.10
Saudi Kayan Petrochemical Company (Kayan) 4.64 4.45 -4.19
Rabigh Refi ning and Petrochemical Company (Petrorabigh) 6.75 6.13 -10.00
Yanbu National Petrochemical Company (YANSAB) 10.00 9.47 -5.63
National Industialization Company (TASNEE) 7.23 7.04 -2.65
Saudi Industrial Investment Group (SIIG) 4.68 4.41 -6.04
Saudi International Petrochemical Company (SIPCHEM) 5.75 6.00 4.22
Sahara Petrochemical Company (SAHARA) 4.88 4.93 1.08
Advanced Petrochemicals Company (Advanced) 5.21 4.59 -13.66
Nama Chemicals Group (NAMA) 2.48 2.49 0.53
Alujain Corporation (ALUJAIN) 3.39 3.97 14.77
Methanol Chemicals Company (CHEMANOL) 3.68 3.56 -3.37
Petrochem 3.87 4.24 8.81
Price on July,19th (US$ per share)
Price on August,19th (US$ per share)
Change %
Qurain Petrochemical Industries Company (AL-QURAIN) 0.69 0.65 -5.38
Boubyan Petrochemical Company (BOUBYAN) 1.86 1.75 -6.00
Most listed petrochemical companies saw share prices declining through August, But leading firms from Qatar and Egypt posted significant gains
LISTED COMPANIES IN THE SAUDI STOCK MARKET
LISTED COMPANIES IN THE KUWAITI STOCK MARKET
LISTED COMPANIES IN THE QATARI STOCK MARKET
LISTED COMPANIES IN THE OMANI STOCK MARKET
LISTED COMPANIES IN THE EGYPTIAN STOCK MARKET
47Number Cruncher
Refining & Petrochemicals Middle East September 2010www.arabianoilandgas.com
47
Source: www.argaam.com
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1250
1350ETHYLENE (FOB FAR EAST)
US
$/t
on
ne
FOB: Freight On Board
07/0
1/09
15/0
4/09
03/0
6/09
20/0
7/09
06/0
9/09
19/1
2/09
06/0
2/10
27/0
3/10
16/0
5/10
03/0
7/10
16/0
8/10
25/1
0/09
25/0
2/09300
400
500
600
700
800
900
1000
1100BENZENE (FOB FAR EAST)
US
$/t
on
ne
CFR: Cost and Freight
Benzene prices reached $820 per tonne, amid uncertainty in crude futures markets which dampened sentiment in the benzene sector.
Ethylene prices have reached $880 per tonne, continuing gains throughout August, supported by strong crude gains.
MEG prices rose to $750 per tonne, underpinned by bullishness in global polyester sales.
Propylene prices have declined to $1150 per tonne. Analysts expect limited supply and strengthening derivatives such as propylene oxide to provide some support.
Polyethylene have prices have increased to $1120 per tonne, backed by the supply shortage due to the prolonged shutdown of some production facilities in the Middle East and low production rates.
Polypropylene prices stabilised at $1250 per tonne in August. Scheduled and unplanned shutdown of plants in the region had caused a shortage of supply offered for export.
PVC prices rose to $960 per tonne in August. Market players expect prices to soften in the coming months.
40
Refining & Petrochemicals Middle East September 2010 www.arabianoilandgas.com
The Big Picture48
Despite the withdrawal of ConocoPhillips, Aramco is going ahead with the Yanbu ProjectA VIEW FROM YANBU
Saudi Aramco is commited to the project.
The importance of upgrading the existing Yanbu refi nery for Saudi Arabia has led Saudi Aramco to go ahead with the project alone, in spite
of the withdrawal of ConocoPhillips from the $10 billion-plus refi nery project.
Saudi Aramco has signed several contracts with local and international contractors for the detailed engineering, procurement and construction (EPC) of the Yanbu‘ Export Refi nery Project at Yanbu‘ Industrial City, on the western coast of the Kingdom.
“Signing these contracts represents a critical milestone for the Yanbu‘ Export
Refi nery Project and will pave the way for many other major activities in the Yanbu‘ area,” said Motassim Al-Ma’ashouq, executive director of new business development.
The project is one of a number of downstream projects that Saudi Aramco is pursuing, and demonstrates the company’s commitment to meeting future worldwide fuel demands. As part of its long-term strategy, Saudi Aramco is now making downstream investments following a massive upstream program that increased the company’s crude oil production capacity to 12 million barrels per day.
The project will build a grassroots refi nery on a site of about 5.2 million square metres. The refi nery will process 400 000 bpd of Arabian Heavy crude and produce 90 000 bpd of gasoline, 263 000 bpd of ultra-low-sulfur diesel, 6 300 metric tonnes per day (mtd) of coke and 1 200 mtd of sulfur.
The upgraded refi nery will use existing Saudi Aramco facilities to receive crude oil and export the refi ned products.
To execute the project, Aramco has incorporated Red Sea Refi ning Company, which will be responsible for the execution and operation of the project.
Aerial view of Saudi Aramco’s existing refinery at Yanbu.
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