NEWS 05 | BUILD & PROJECTS 09 | SCIENCE & TECHNOLOGY 11 | DOWNSTREAM DATA 30 | EVENTS REVIEW 32
NEWS, DATA AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES
KUWAIT’S EXPANSION PLANS EXCLUSIVE: QPIC CHAIRMAN SAYS INVESTMENT BACK ON THE AGENDA
APRIL 2010
AIR APPARENT GAS DETECTION IN DOWNSTREAM PRODUCTION FACILITIES REVIEWED
REACTOR WATCH MULTIPOINT ASSEMBLIES ENABLE 3D REACTOR TEMP PROFILING
GTL TAKES FLIGHT Qatar is taking the lead in adding value to its gas reserves with gas to liquids and kerosene blending projects
An ITP Business Publication, licensed by Dubai Media City
Contents 1
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IN PRINT
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20 REFINERY GAS DETECTION Industry experts reveal how to select the right gas detection package for your refining and petrochemical facilities.
April 2010 Volume 03 Issue 04
24 REACTOR WATCH
5 REGIONAL NEWS
Multipoint assemblies enable 3D temperature profiling of process reactors says Chris Chant of Okazaki Manufacturing Company.
Kuwait’s QPIC project on track • Local refining capacity up • Unipol nets Carbon Holding deal • SABIC raises MEG prices
26 MIDDLE EAST DOWNSTREAM WEEK
10 MIDDLE EAST MARKET UPDATE
Event report: Abu Dhabi conference addressed the critical issues facing the region’s dominant refiners.
Build & Projects • Operations & Maintenance • Science & Technology • Equipment & Machinery • Sales & Shipments
30 NUMBER CRUNCHER
14 NEW TIMES, NEW THINKING
Refining and Petrochemicals Middle East provides market data and analysis for the region’s listed downstream companies
Contax Partners asses the steps project owners are now taking to ensure they identify, attract and secure the right contractors.
32 DOWNSTREAM DIARY
16 GAS TO LIQUIDS TECHNOLOGY FOCUS
Dubai Plast Pro 2010 delivered a knock-out conference in March. Check out the eclusive online gallery at ArabianOilandGas.com.
Monetising gas reserves whilst improving fuel emissions is being tackled by Qatar’s huge GTL project portfolio.
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Refining & Petrochemicals Middle East April 2010
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NPCC bags $560m ADNOC contract KSA Alert: Oil industry terrorism threat RAK Petroleum enjoys Oman gas success Schlumberger snaps up Geoservices for $1 billion J Ray McDermott nets Saudi crude gathering project
EDITOR’S CHOICE
An eye on Saudi Aramco
Laffan Refinery Inauguration
Arabianoilandgas.com picture gallery takes you behind the scene of Saudi Aramco with brand new photographs of the energy giant’s different sites and activities.
Arabianoilandgas.com reporters were at the official inauguartion of Ras Laffan’s latest Qatargas refinery expansion. Follow all the action on as it happens on:
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BREAKING NEWS AND VIEWS FIRST VIEW FROM JUBAIL
JACOBS BAGS ARAMCO CONTRACT
RISING GAS TOPS LNG16 AGENDA
Jacobs Engineering Group announced that it received a contract from Aramco to develop a basic engineering package.
Participants at LNG 16 will discuss the increase of gas prices in the international market, according to Chakib Khelil.
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OMAN TO KEEP GAS OUTPUT STEADY
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WEB FORUM
QATAR EYES NEW LNG TERMINAL
Oman LNG plans to keep its liquefied natural gas output steady at around 8 million tonnes a year for the foreseeable future but is ready to use spare capacity if needed.
Qatar is interested in building a new receiving terminal for liquefied natural gas in Europe, with Bulgaria touted as the front running location.
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Refining & Petrochemicals Middle East April 2010
Execlusive interview with the CEO of Sipchem, Ahmed Al-Ohali
E JOIN TH DEBATE
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4 Comment
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Refining sector needs investment boost
T
he local refining sector needs intensive investment to meet booming local demand for refined products. Discussions on the sidelines of the Middle East Downstream Week in Abu Dhabi last month indicated that far too few of the proposed refining projects have in fact gone through to execution phase. Conversations over lunch were dominated by the cost of projects already announced, and the number of planned refining projects in the region. What disappointed me was learning how many of these projects have been slowed, shelved or cancelled altogether. Announcing major projects is all good, but the most important thing is to go ahead with these investments. Demand for fuels in the region is anticipated to rise every year for at least a decade. The region needs more refining capacity. I was also puzzled to hear about the cost of the newly announced refining projects across the Arab world, which has reached US$146bn. This includes new refineries and expansion plans, using numbers compiled by the Organisation of Arab Petroleum Exporting Countries (OAPEC). Existing refineries in the region are inefficient compared to best in class examples, and the goods churned out don’t meet many international standards. The OAPEC study suggests that 51% of the projects are delayed, while 26% of the projects have been shelved. This means only 23% of the projects are on track. Given the huge downstream value which could be captured by local refiners, this seems short-sighted. Project costs must be at bargain levels now, and the consensus was that those which are currently on ice should get back on track as soon as possible.
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Refining & Petrochemicals Middle East April 2010
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News 5
NEWS
APRIL 2010
Al-Qurain petchem seeks expansion
QPIC profits jumped 226% in 2009, opening the door to new regional investments Kuwait’s Al-Qurain Petrochemical Industries Company (QPIC) is looking for new investment opportunities across the Middle East region, and its existing projects remain on track, Issa Al-Isaa, vice board chairman of the Kuwaiti joint stock company, QPIC told Refining and Petrochemicals Middle East. “We are continuously seeking new opportunities in the petrochemical sector, locally and in the MENA region,” revealed AlIsaa. “As part of our long-term strategy, QPIC will be investing in the GCC and MENA region, our first project outside Kuwait is the Methanol project in Algeria,” Al-Issa said. “2009 was a successful year for us. Our net profit at year end was up 226%, to US$24.61 million compared with the 2008 loss of $19.41 million,” he said. “Our net earnings per share (EPS) were $2.32 per share (KD 0.647), against negative earnings per share of $17.75 (KD 0.512) in 2008.” AlQurain is optimistic about 2010 and expects it to be a stable year, with positive results. “As credit
US$1bn
The expected cost of the methanol project in Algeria
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markets improve and banks begin lending again, QPIC will aim to expand its petrochemical and oil and gas investments,” Al-Issa revealed. The company anticipates signing the final joint venture agreement for its methanol project in April. “All agreements are in place and we expect the final signing to happen any day now,” Al-Issa told RPME. “We are ready to
award $200m EPC contracts for the project in the near future,” revealed the vice board chairman. “We expect the commercial start up in 2013,” he added. The project is 49% owned by Sonatrach and 51% by Almet, which QPIC owns a major stake in. The rest is split between local company Sotraco, Mitsui of Japan, Lurgi of Germany and PPSL. The Algerian Methanol project is expected to produce 1 million tonnes per year. Almet won the project back in 2007.
Issa Al-Isaa, vice board chairman of QPIC.
Lurgi will be the lead EPC contractor for the project. The front-end engineering and design (FEED) work was almost complete in late 2008. Construction work will take a further 32 months. Sonatrach will provide the feedstock to the project with a subsidised price. “The price of the feedstock allocated to the project is very competitive,” said a Kuwaiti based source close to the project. QPIC has two associate companies, United Oil Projects (UOP), and the Kuwait Aromatics Company, of which it controls 20%. The Kuwait Aromatics Company (KARO) also owns 57.5% of the Kuwait Styrene Company. QPIC retains a stake in the Equate projects in Kuwait. “The TKOC, aromatics, and styrene plants that were recently inaugurated are long term investments. The average pay-back period for a world-scale petrochemical plant is between six to seven years. Having said that, the Kuwait Olefins Company started production in late 2008 and despite the global economic crisis, TKOC witnessed solid profits in its first year of operations. The aromatics and styrene plants have begun production in late 2009 and we expect the plants to perform well in their first year of operations,” he concluded.
Refining & Petrochemicals Middle East April 2010
6 News
OAPEC refining capacity up New projects will add 5.03 mbpd of refined products by 2014
Refining capacity in the Arab world is expected to be increased by five million barrels to 12.425 mbpd by 2014, according to a report issued by the Kuwait-based Organisation of Arab Petroleum Exporting Countries (OAPEC). Saudi Arabia, UAE and Kuwait are leading the trend due to their huge crude reserve capacity which represents almost 40% of the world’s extractable crude deposits. Saudi Arabia started the PetroRabigh integrated refining and petrochemical project last
year, which will be followed by Al Jubail and Ras Tanura integrated projects in joint ventures with Total and Dow respectively. In January, the Saudi government said that Aramco would build Jizzan oil refinery rather than private firms that had bid for the delayed project. The new projects will increase throughput of the 10 OAPEC nations noticeably due to the increase of demand on the refined products, and is expected to cost US$100bn, the organisation said.
The majority of the new projects are taking place in Saudi Arabia, UAE and Kuwait.
“These projects will add nearly 5.03 mbpd to the Arab refining capacity, but they are beset with challenges and obstacles, which could lead to postponement or abolition of some of them, mainly those related to new refineries,” OAPEC said in its 50 page study. According to the study, Arab nations currently have 64 refineries, pumping nearly 7.39 mbpd at the end of 2008 compared with 7.2 mbpd at the end of 2006. “These obstacles include shortage of funding and low investment return because refining ventures are normally not highly profitable. Another challenge is the state of uncertainty in the energy market due to ambiguities surrounding the global demand for refined products as a result of lack of transparency in most consumers about forecasts on future demand,” it added. EPC cost is also a major challenge facing the construction of these projects, the report noted.
NAMA: Epoxy demand increases in 2010 Global demand for Epoxy will reach 1.655 million tonnes in 2010, increasing to 1.810 million tonnes by the year 2014, according to a recent study by Saudi Arabian firm NAMA Chemicals. The report indicates that the majority of this demand will come from Asia and Australia. The European market ranks second worldwide in terms of Epoxy materials demand, reaching 400 000 tonnes during the current year and expected to increase to 420 thousand tonnes in the year 2014, NAMA said.
“We are seeing a substantial upward price movement during the first quarter of 2010 and strong demand,” Abdolmohsen Al Ogaili, CEO of NAMA Chemicals. NAMA has continually increased its production capacity over the last five years from 20 000 tonne to 60 000 tonne. “By 2012, the production capacity of our plant will increase by 100%, to be in the list of top five major producers of Epoxy in the world. This will positively reflect on the financial performance of NAMA in general,” Al Ogaili said.
Refining & Petrochemicals Middle East April 2010
Abdulmohsen Al Al-Ogaili, CEO of NAMA.
Huntsman reveals new KSA project Huntsman Corp and Saudi family-owned conglomerate Zamil Group started production at a joint-venture plant that will add 6.5% to the global ethylene amines supply. The 50-50 partners spent $288 million (1.08 billion riyals) to build the plant owned by Arabian Amines Co, the official SPA news agency reported. The plant starts at a production capacity of 27 215 tonnes per year but it can be increased to 41 000 tonnes per year. The product will be marketed by Huntsman in Asia and Europe. Ethylene amines are used in various applications including asphalt, fuel additives, bleaches, corrosion inhibitors and fabric softeners.
Yanbu JV extends bidding time Saudi Aramco and ConocoPhillips have extended the deadline for bids for a solids handling unit at their Yanbu refinery joint venture. The new bid deadline for the construction of the unit is June 1, industry sources said. It has also been reported that Saipem, Techint of Argentina, Petrofac, Senet, ThyssenKrupp Robins, Flsmidth and Daelim Industrial are all bidding for the solids handling unit. “The extension of the bidding closing date is due to additional work requested by the client,” a source told Reuters. US firm KBR has already completed the front end engineering and design of the refinery but it has been reported that the delaying of the bidding deadline may be due to design modifications.
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News 7
Clean diesel unit unveiled
Sasref’s new diesel unit is the first in KSA to produce 10 ppm diesel Saudi Aramco and Royal Dutch Shell’s joint venture, Sasref refinery, has started commercial production at an ultra low sulphur diesel unit targeting European markets, the company said in statement. The unit at the 305 000 barrels per day (bpd) refinery, located in Jubail on the Gulf coast, started production of around 100 000 bpd of ultra low sulphur diesel, making it among the first Saudi producers with sulphur at less than 10 parts per million, Sasref said in a statement. A company source said last month the unit would reach full production by the end of February after starting trial production.“The start of the unit reinforces our strategy to keep pace with future trends and comply with environmental and marketing requirements which will help Sasref to maintain its competitiveness in the Middle East and Asia,” said Abdulhakim al Gouhi, president, Sasref.
All Saudi Arabia refineries will produce the 10ppm diesel by 2014 instead of 500 ppm.
“The new unit meets the highstandard diesel specifications in Europe,” he added. The cost of the upgrade was valued at more than $400 million, Gouhi said in January. The crude refinery can export
as much as 60 000 tonnes of oil products per day, mainly fuel oil, naphtha, gas oil and jet. SASREF is a joint venture export refinery owned 50 – 50 by Saudi Aramco and Shell. It is located in Jubail, and targeting Asia.
Dow sets up ME polyurethane alliance Dow Formulated Systems AND Saudi based Juffali & Brothers, announced they signed a business alliance in their polyurethane systems business, in addition to the construction of a polyol blends plants in Jeddah. “This alliance reinforces Dow Formulated Systems’ commitment to our customers and the industries we serve in the Middle East. Our longstanding business relationship with E.A. Juffali & Brothers has offered the conditions for this significant step ahead that further accelerates the implementation of our
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global business strategy based on our wide and detailed presence, market knowledge,” said Juan Antonio Merino, general manager of Dow Formulated Systems, the new global business unit of Dow, which combines the company’s polyurethane systems and epoxy systems capabilities, potential in research and development, technical service and tailored production serving its growing customer base with a global network of 30 system houses. “We have been partnering with Dow in a variety of businesses
since 1976, and this important alliance allows us to further strengthen our relationship, increasing our ability to sustain the dynamic growth of our customers in this region,” said Dr. Souahil El Farouki, general manager of Juffali Chemical Group. “The planned facility will produce Dow formulated polyols and the respective Dow Polyurethane Systems will be marketed in the region. The alliance with Dow is instrumental to ensure the new plant competitiveness, sustainability and long term success,” Dr. El Farouki added.
Briefs Aramco and Dow are set to relocate their multibillion dollar integrated petrochemical and refining joint venture project from Ras Tanura to Al Jubail, Saudi Arabia to save costs. The project is currently in the planning phase, with a number of international contractors working on front end engineering and design (Feed) studies. Saudi Aramco Total Refining Co (Satorp) is expected to sell Islamic bonds to help finance the 400 000 barrels-a-day facility that is being built in Jubail, KSA. The partners in the US$12 billion Saudi Aramco and the French supermajor Total have appointed Deutsche Bank AG, Samba Financial Group and Calyon to manage the sale. The sukuk is expected to be around $1 billion and the joint venture partners are also exploring the possibility of issuing an international conventional bond to reduce the dependence on short-term bank financing. Qatargas inaugurated the Laffan Refinery in early April. The refinery is one of the largest condensate refineries, and the first one in Qatar. It has a processing capacity of 146 000 barrels per stream day (bpsd) and utilises the field condensate produced from the Qatargas and RasGas facilities. Construction of the project was completed in July 2009 by GS and Daewoo (GSDW).
Refining & Petrochemicals Middle East April 2010
8 News
Snapshot Middle East petrochemical sector recovers Economic indicators point to continued recovery for chemical companies in 2010, including a positive development for producers in the Middle East, with global chemical industry output forecast to increase 4.6%, offsetting a 4.6% contraction in 2009, Mohammed Al Mady, chairman of the GPCA and CEO and vice chairman of SABIC, told the 3rd annual general meeting of GPCA. Al Mady expressed confidence that the recent crisis was over for the industry, citing data from the American Chemistry Council (ACC) which pointed to chemical industry production growth averaging 3.7% across the Middle East, including 6.3% in Saudi Arabia 3.4% in UAE, 3.2% in Kuwait and 7.4% in Qatar.
Algeria to spend $23bn on refining sector Algeria’s state energy giant “Sonatrach” is set to spend US$23bn to increase its refining capacity, according to Chakib Khelil, Algerian’s energy and mining minister. Algeria is planning to spend more than $69bn on the energy sector, including $23bn to develop the downstream and the refining sector. The plan includes the development of Tiaret refinery on the west of the capital Algeria, along with the upgrade of various refineries located in Skikda in the east and Arzew in the west.
Kuwait readies for China JV
Kuwait will supply all the crude to the US$9bn integrated project Kuwait expects to receive approval to develop a $9 billion refinery in China by the end of the year, a Kuwaiti oil executive said. Kuwait Petroleum Corp’s (KPC) chief executive Saad AlShuwaib said the project’s investors were still hoping to commission the 300 000 barrels per day (bpd) refinery by 2013. “We expect to obtain final approval by the end of the year,” Shuwaib said. The project has suffered years of delays. After initial approval in 2006, it has yet to receive Beijing’s final nod. Kuwait said last September it hoped to get final approval in the first quarter 2010. It will supply all the crude to the refinery and produce one million tonnes of ethylene per year. State-owned KPC and Sinopec each hold a 50% stake in the joint venture project, with KPC planning to give 20% of its share to international partners, it said.
KPC was in talks with several international companies, Shuwaib revealed. BP Plc was linked with the project in 2007, but in 2008 appeared to be out of the running
The integrated refining and petrochemicals project will produce 1million tonne of ethylene.
BDP International and Kanoo Freight join forces BDP International and Bahrainbased Kanoo Freight, a division of Yusuf Bin Ahmed Kanoo, have formed a joint venture to capitalise on the logistics and transportation needs of the Middle East’s expanding petrochemical and refining industry. “With significant investments in the downstream petrochemical industries and abundance of feedstocks, the region is becoming the epicentre of the global petrochemical industry, mainly in Saudi Arabia,” said BDP president and CEO Richard Bolte.
Refining & Petrochemicals Middle East April 2010
when Kuwait shortlisted Royal Dutch Shell and Dow Chemical Co as potential partners for refining and petrochemicals respectively. Kuwait said in September it had revived talks with BP.
The new company will be based in Damam, in Saudi Arabia. “The establishment of this joint venture will provide the services needed for the region to fulfil its vision of economic diversification and adding more value downstream in the hydrocarbon industries,” said Fawzi Ahmed Kanoo, board director of Kanoo Group and chairman of Kanoo Freight. BDP said industry analysts have forecast that within 10 years, the Middle East would account for approximately 75% of the world’s petrochemical exports.
Don’t miss 18 - 21 April LNG16, Conference Oran, Algeria 16 - 19 May MEPIPES, Meeting Abu Dhabi, UAE. 24 - 26 May The 7th Middle East Refining and Petrochemicals Conference and exhibition. Manama, Bahrain. 14-16 June First Gulf Plastics Summit Dubai, UAE.
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9
BUILD&PROJECTS
Takreer signs $9.6bn EPC contracts
EPC works cover five main packages which will double company’s production capacity Abu Dhabi Oil Refining Company T ( AKREER ) has signed EPC agreements worth US$ .96billion with four Korean companies to expand its oil refining capacity in Ruwais. The EPC works cover five main packages of the expansion project, which will increase the refining capacity of TAKREER of crude oil to 417000bpd and nearly double its production of transportation fuels, gasoline, jet fuel and diesel by 0 2.3 1 The agreements were signed with M/s SK Engineering and Construction Company for the crude oil distillation and associated downstream units package, M/s GS Engineering and Construction Corporation for the residue fluid catalytic cracking unit and associated refining units and marine facilities packages, M/s Samsung Engineering for the offsite and utilities package and M/s Daewoo engineering
Takreer awarded the five packages in November 2009.
and construction for the tankage and associated interconnecting piping package. The project will be integrated with the neighbouring petrochemical industry through exporting .1.1Million t/y of propylene to the Borouge Olefins Complex in Ruwais. “This will result in saving investment cost and reduce
operating cost to the benefit of both operating companies,” the company said in statement. “It also aims to meet the growing local demand.” TAKREER currently operates at 49 0,000 bpd name plate capacity at its two sites in Abu Dhabi and Ruwais. The process configuration consists of 12major process units with supporting offsite and utilities units. Latest technology to reduce the carbon footprint has been incorporated enabling TAKREER to become an environmental pacesetter in future. The centerpiece of the project is the residue fluidised catalytic cracking unit; at ,72 1000 bpd, the largest of its kind under construction. The scheme was selected to profitably upgrade the bottom of the barrel and to maximise propylene production for capturing the benefits of integrating with petrochemicals industry.
Daelim scoops Sahara deal
Kayan works reach 90%
Sahara Petrochemicals and Saudi Mining Company (Ma’aden) signed an agreement to start engineering and preliminary construction works with South Korean contractor Daelim to initiate a caustic soda and ethylene dichloride project. The project will be located in Sahara PCC complex in u Jbail. “The first phase is expected to cost US$ 4m 1 covering the first nine months and will be followed by the signing of the EPC contract,” said Esam o Fuad Himdy, managing director of Sahara. The caustic soda and ethylene dichloride is a 50-50 jointventure between Sahara PCC and Saudi Arabian Mining Company M ( a’aden) using German UHDE technology. “The construction of the project will be completed in the third quarter of 0 2,2 1” he added.
Engineering works on the Saudi Kayan project are progressing as scheduled and the facility is expected to start up during the second half of 2 010, according to Mutlaq Al-Morished, chairman of the board of directors of Saudi Kayan Company and executive vice president, SABIC corporate finance. “Implementation works are well on track and basic units operation is expected by second half of 2 010,” Al-Morished said. “We have completed 9 0% of the EPC works,” he added. Meanwhile, Al-Morished revealed that his company is completing studies to replace choline chloride and dimethyl formamide with other products including natural and synthetic butanol for detergent, isobutanol and butanol to increase
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the profitability of the company, Al-Morished revealed. The company was initially supposed to produce 4 million metric tonnes of petrochemical and chemical products including 2 0 000 t/y of choline chloride and 50 000 t/y of dimethyl formamide. SABIC holds 3 5% of the company’s capital; Al Kayan holds the remaining 2 0% . 45% is listed in the Saudi stock exchange.
Kayan will boost SABIC’s production output
MMG signs LoI with Daelim Mohammad Al-Mojil Group has signed a letter of intent with Saudi Daelim Company to conduct mechanical works for parts of Al Jubail refinery project, owned by Aramco. Al-Mojil Group will also supply Daelim with labour force and machinery for part of the project which is located in Al-Jubail Industrial City 2. “The total cost of the contract is US$44m,” said a source close to the company. “We expect to start executing the special works in H1 2010, and completing it by 2012”. Saudi-based Mohammad al-Mojil Group (MMG), is a contractor specialising in oil and gas and petrochemicals projects, and has signed many contracts to undertake several subcontractor works for different petrochemical projects in Saudi.
Refining & Petrochemicals Middle East April 2010
10
OPERATIONS&MAINTENANCE
APC polypropylene plant goes offline
The scheduled turnaround works will not affect the company’s polypropylene sales Advanced Petrochemical Company has closed its facility located in Al-J ubail industrial zone for three weeks to conduct maintenance work starting from 10th of March, the company has said. “The plant will remain shut for about three weeks. During the turnaround, there will also be a catalyst change at the PP plant,” a source from the company said. The company produces 450 000 tonne/year of polypropylene (PP), and 450 000 tonne/ year propane dehydrogenation (PDH). The PDH is used as feedstock for the PP plant. The scheduled maintenance will not affect the sales of the company during this period.
450 000 t/y APC’s annual polypropylene production capacity Source: APC annual report
APC salls about 60% of its product in Asia, 35% in the Middle East and 5% in Europe, it produces about 112 000 tonne every quarter.
Sharq to shutdown its LLDPE facilities Saudi Arabia’s Eastern Petrochemical Company (Sharq) is expected to shut down its linear low density polyethylene plant for maintenance starting from early April. The company will close its two LLDPE facilities for 14 days to undertake the scheduled maintenance. The capacity of each plant is 3 5 000 tonnes per year. 7 The company started commissioning its third expansion project last November. Phase three output is slated to include 1.3
Sharq is a JV between SABIC and SPDC.
million tonnes each year of ethylene, 400 000 tonnes per year of high density PE (HDPE)and 400 000 tonnes per year of lin-
Refining & Petrochemicals Middle East April 2010
ear low density PE (LLDPE)and 7 0 000 tonne/ year of ethylene 0 glycol (MEG). The annual production capacity of the complex will reach 5 million tonnes per year, including the largest single MEG production facility in the world. Sharq is a 50-50 V Jof SABIC and Saudi Petrochemical Development (SPDC). SPDC is owned 45%by J apan Bank for International Cooperation (J BIC), and 55%by 6 2J apanese companies, mainly of the Mitsubishi group.
SABIC schedules EG maintenance SABIC has scheduled maintenance periods for its ethylene glycol (EG) lines in the second quarter and the fourth quarter 2010. The concerned plants are Eastern Petrochemical S ( harq )3450 000 t/y unit in Al u Jbail, Saudi Yanbu Petrochemical Y ( anpet)of 53 0 000 t/y plant and u Jbail United Petrochemicals 0 7 0 000 t/y plant; the maintenance of these plants to take place between April and May. Meanwhile, Sharq 2plant, which produces 450 000 t/y of ethylene glycol, is scheduled for 4 Q.
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11
SCIENCE&TECHNOLOGY Polyethelyne production is expected to increase in the Middle East.
Carbon Holding selects UNIPOL tech The PE plant has three production lines with a total production capacity of 450 000 t/y Egypt’s Carbon Holding has selected the Univation UNIPOL process technologies license for its three PE plants, located in Ain Sokhna. The plant has three production lines with a total capacity of 450 000 t/y, and will produce HDPE using Univation Technologies’ single-reactor PRODIGY Bimodal Catalyst, while the two other swing lines will manufacture LLDPE/HDPE and include the latest XCAT Metallocene Catalyst technology. “Our bid evaluation process focused upon technical
reliability and commercial viability and we are very pleased to present the award to Univation,” said Charles Garfinkel, chief investment officer, Carbon Holdings. “Univation is very proud to be the polyethylene licensing partner in Carbon Holdings’ petrochemical project in Egypt. We have a long history of working to support industrial development through the licensing of PE process technology. Our overall experience in high capacity reactors, recognised cost synergies of
multiple UNIPOL PE Process lines and ongoing investment in technology are all key Univation benefits to this project,” commented Cindy Shulman, president, Univation Technologies, LLC. Steven Stanley, commercial vice president, Univation Technologies, emphasised: “The UNIPOL PE Process’ well-proven commercial experience with 4500 00 t/y capacities and beyond provides high-level assurance of operational success and low technological risk.”
LyondellBasell launches Trans4m
Emerson boosts services
LyondellBasell Industries has expanded its licensing portfolio of olefin recovery and conversion technologies. The new Trans4m process technologies offers tailored solutions for C4 and higher olefin separation process requirements, as well as isomerisation and extraction. “By expanding our portfolio of well-proven technologies to include a full range of olefins recovery and conversion processes, we offer licensees a simplified, modular approach to achieving a complete solution,” said Kaspar Evertz, senior vice president, technology business – licensing. “Operators can utilise any combination of Trans4m processes needed, enabling them to more effectively maximise the value of their olefins balance.”
Emerson Process Manageeers’ own maintenance maintena and ment has expanded the he operations teams,” team said reach of its flow metering ng Mark McCready, business management services,, development manager man for METCO, to Dubai. Emerson’s METCO. MET “These new services Emerson’s total t mehelp companies manage tering management mana their fiscal, allocation, to contracts guarantee guar Custody measurand environmental meadeliver timely, timely accument is important. surement infrastructure rate data on its clients’ through the provision of software, process throughput. Key perK audit and consultancy services, formance measures are agreed field technicians, and office based upon up front to ensure the sysengineers,” the company said. tems are managed according to “Our experienced engineers, the clients’ business drivers. auditors and technicians will offer Emerson build an exit stratboth offsite and onsite support in egy in to some TMM contracts, the region, performing audits and especially those in developing health checks of metering systems markets. The exit strategy inas well as offering a range of train- volves training site personnel ing courses to improve the skills to take over the operation of the and competencies of our custom- site’s metering facilities.
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Sahara wants HP for IT datacenter Sahara Petrochemicals Company has selected HP BladeSystem and HP ProLiant servers solutions to automate and optimise its datacenter processes. The BladeSystem enclosure will allow the firm to consolidate its server, storage, network, power and management capabilities. “When it came to selecting the right datacenter solution we found that HP solutions best met the requirement of our IT infrastructure,” said Ihab Hawari, IT manager at Sahara Petrochemicals. The deployment of the new technology is part of Sahara’s overhaul to support and meet its new growth targets.
Refining & Petrochemicals Middle East April 2010
12
EQUIPMENT&MACHINERY
Honeywell launches I/O transmitters
New devices complement other wireless transmitters in Honeywell’s XYR 6000 series Honeywell has added universal input/output (I/O) transmitters to its family of XYR 6000 wireless products. The transmitters allow manufacturers to wirelessly monitor more plant points with fewer devices. By transmitting signals from up to three different types of inputs – including measurement devices with a high-level analog, temperature or milli-volt, or contact-closure switch input. “The XYR 6000 Universal I/O transmitters can help plants save up to 30% in costs over similar devices that can transmit signals from only two inputs,” the company said in statement. “This XYR 6000 family of transmitters, which includes a version that can transmit up to two inputs and provide a local discrete
output, is ideal for applications such as wirelessly monitoring level switches, pump status and system alarms,” it added. The devices also carry intrinsically safe approvals from FM Global and the Canadian Standards Association for use in hazardous areas. “More manufacturers are considering wireless monitoring to improve asset management while saving costs, but converting to a wireless infrastructure isn’t always easy,” said Raymond Rogowski, global product marketing manager wireless, Honeywell process solutions. “Devices such as the XYR 6000 Universal I/O Transmitter can ease the transition to wireless and help plants reap the overall safety, equipment reliability and process efficiency benefits that come with it.”
The device is ideal for applications such as pump status.
OFI expands in the region VigilantPlant launched One For Instrumentation (OFI) and Induchem UK have formed a new company called Induchem Global Projects to serve their growing client list in the Middle East, said Jason Wakefield, managing director of One For Instrumentation. “We will be bidding for more valve contracts across the Middle East through our network of agents. The new partnership means we have the full resources of both companies for the supply, installation and commissioning of valve and actuation packages for the oil and gas industry,” said Wakefield. The company has also expanded
Jason Wakefield, manager, OFI.
its presence in the region through appointing distribution agents. “We have spent a long time to set up our network of agents across the Middle East. This is a key market for our business and we feel we now have the right people in place,” explains Wakefield. “We are now in a position to offer a one stop solution for all our customers instrumentation requirements,” says Wakefield. “In the eight years we have been in business we have gone from a simple gauge manufacturer to the ability to offer all products for flow, pressure, temperature and level measurement and control. The future looks bright,” he added. The company has recently signed agreements with a number of energy companies across the Middle East including Qatar and Kuwait to supply them with different equipments including valves and flow meters.
Refining & Petrochemicals Middle East April 2010
Yokogawa Electric Corporation announced the release on of new VigilantPlant Services, the comprehensive package of automation service solutions that help manufacturers achieve safe, environmentally friendly, and profitable plant operations in line with the Yokogawa VigilantPlant concept. “From design through project execution, operations, and maintenance, VigilantPlant Services provide manufacturers the support they need to achieve op-
erational excellence over the entire plant lifecycle,” the company said in statement. VigilantPlant Services help users to achieve operational excellence by improving the effectiveness of automation platforms. “Conventional maintenance and repair services are typically reactive in nature; in contrast, VigilantPlant Services take a proactive approach to maintenance that reduces the total cost of ownership,” Yokogawa Electric said.
VigilantPlant Services helps users by improving the effectiveness of automation platforms.
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13
SALES&SHIPMENTS
SABIC fixes April ACP of MEG prices
Current Asian prices of $1050 per tonne is almost double trading prices one year ago Saudi Arabia Basic Industries Corporation (SABIC) has fixed Asian Contract Prices (ACP) of mono ethylene glycol (MEG) for April at US$1050 per tonne, which is the same level as March’s prices. The current price level is almost doubled compared to April 2009, when prices hovered at their lowest level of arround $540 per tonne. MEG contract prices are generally set by the three major players of the industry, which includes SABIC, MEGlobal and Shell Chemicals. Shell rolled over its April ACP nominations at $1,100 per tonne
Cristal ups TiO2 prices for April Cristal Global (Cristal) has announced that it will increase prices on all of its anatase and rutile Tiona and Cristal titanium dioxide (TiO2) products sold in certain regions staring from April 1st. In Europe the company said that it will increase the price by US$135 per tonne compared to March prices, while in the Middle East and Australia, it will be sold at $100 per tonne higher than March offers. Prices for the Asian markets will be increased by $150 per tonne compared to March. Prices for all Tiona and Cristal titanium dioxide (TiO2) products will increase by $100 per tonne. Cristal Global, is a subsidiary of Saudi Tasnee, and it is world’s second-largest producer of titanium dioxide.
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CFR Asia. Meanwhile, MEGlobal has nominated its April contract price for MEG for Asia at $1050 per tonne levels. SABIC is the largest MEG producer in the world, with a production capacity exceeding 5.345million t/y, through 10 production units located in Al Jubail Industrial City and in Yanbu. The company signed a deal last year with Dutch storage and terminal operator to rent MEG storage tanks at the port of Zhanjiagang, in the eastern part of China, as it aims to improve the delivery of the products to end users, and reduce the delay in product deliveries.
SABIC is the largest MEG producer in the world with a production capacity of 5.345m t/y.
GulfNav buys four tankers
Arab Potash sells fertiliser to India
Gulf Navigation Holding signed an agreement with its partner Stolt-Nielsen to buy a total of four 44 000 deadweight tonne chemical carriers. The Gulf Navigation joint venture with Stolt Tankers, headquartered in Dubai will own the four vessels and is scheduled to take delivery of the first two vessels immediately while the re-
Arab Potash Company and Indian Potash have signed a contract to supply 600000 tonne of potash fertiliser to India over the period until March 2011 starting immediately. “This is the largest ever volume contracted between the two companies who have had commercial relations beginning in the mid-nineties,” the company said. The prices and terms of this sale are in line with market prices in India.
maining two will be delivered in June and July respectively. The four sophisticated tankers will be employed in the Stolt Tankers Joint Services and be technically managed by Gulf Stolt Ship Management in Dubai. These four quality vessels have an overall deadweight of 176 000 metric tonnes, and will carry clean refined products.
The four quality chemical vessels have an overall deadweight of 176 000 metric tonnes.
Arab Potash is a Jordan based company.
Refining & Petrochemicals Middle East April 2010
14 Market Analysis
New Times, New Thinking for Project Owners Kathleen Bury and Wissam Batran from the Business Advisory team at Contax Partners explore the implications of a more conservative era of project ownership, including risk sharing mechanisms and incentive schemes
B
etween 2004 and 2008, the energy project Capex market was in a boom cycle with overambitious spending and the awarding of projects that resulted in a severe resource crunch and greater than ever cost escalations. The market was clearly a seller’s market with some top tier EPC contractors being selective and turning down project work whilst the majority took the opposite road and overloaded themselves. This resulted in numerous project schedule and budget overruns as contractors were unable to cope with the project workload burden. Over the past year, however, we have seen the pendulum swing back towards the buyer. This is primarily as a result of decreasing contractor backlog and the postponement of many energy projects as project owners look to take advantage of the reduced input costs. Nevertheless, despite this shift, project owners are still faced with the challenge of how to identify, attract and secure the ‘best fit’ contractors for their project at the right price. Although some signs of global economic stabilisation have begun to emerge, there remains a great deal of uncertainty in the market with many companies financially strained and thus more risk averse. In today’s market, contractors are more robustly assessing their opportunities against stricter criteria and are asking themselves key questions before bidding for a project, for instance: • Project owner risk: Is this project owner reliable and committed to the project? Do they pay their bills on time? What are the
Refining & Petrochemicals Middle East April 2010
Kathleen Bury is director of market analysis.
Wissam Batran is a consultant at Contax Partners.
project owner’s capabilities in managing the project? • Project cost risk: How are project costs evolving? How can we accurately forecast certain costs for projects due for award next year? Will the project owner be willing to share some of the risk with the contractors? If so, how? • Execution Capability: Do I have the true capability to execute this project profitability? • Bidding costs: What is the estimated bidding cost? Are we really able to afford this bid cost given the other bids that we are putting together? • Competition: Who else is bidding on this project? What are my chances of winning?
Realising the need to adapt to this changing contracting landscape and attract competent and quality contractors to their projects in a competitive bid environment, many GCC energy sector project owners have taken initial steps to share some of the project cost risk elements with their
$146
bn
Estimated budget for new refining projects across the MENA region Source: Organisation of Arab Petroleum Exporting Countires
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Market Analysis 15
Qatargas has offered to reimburse contractors for bidding costs to increase competitiveness on projects.
contractors and adopt incentive schemes. This does not mean moving away from the traditional lump sum turnkey (LSTK) form of contract, but rather the addition of some risk-sharing clauses and relaxation of some terms and conditions which were a significant burden for contractors. A few projects in 2009 saw project owners take initiatives to attract contractors and ease their risk burden; on the recently awarded Plateau Maintenance Project, Qatargas offered to reimburse contractors for their associated bidding costs to increase the competitiveness of the project. Some project owners in Abu Dhabi and Saudi Arabia also took steps to reduce the risk premium levels that contractors include
within their bid prices, by offering advanced payments, relaxing some of the terms and conditions and indemnifying the contractor of certain obligations. These steps enabled the project owners to decrease the EPC bid costs by 15-20%, a key economic target for any project. Certain project owners have also taken the step towards holding direct negotiations with trusted EPC contractors with which they have worked with in the past. This strategy generally helps to reduce the time and cost associated with tendering a project on a competitive basis, which can considerably extend a project timeline and cost several millions of dollars. However, on the flipside, it can also exclude potential new
Graph 1 Total GCC EPC Workload: Q1 2007 - Q4 2012
competitive players from the race. These risk sharing mechanisms and incentive schemes, tailored to each owner’s risk appetite, have in some respects signalled the development of a more balanced relationship between project owners and contractors, enhancing trust between the different parties. While this new balance can reduce risk premiums and increase project attractiveness to contractors, it also means that the project owner is taking on more risk; a behaviour which many contractors have been looking forward to seeing project owners develop. However, there are a number of other steps that project owners can and are taking to ensure that they identify, attract and secure the right contractors for their project: 1. Understand the trends in the market around key areas such as input costs, labour availability, the likely project awards and the ‘sweet spot’ for award - See Graph 1. 2. Robust benchmarking assessment of EPC contractors during PQ and bidding stages to identify and rank existing and new contractors against key attributes around competency, financial health and capacity. 3. Further analysis of the project execution risks that are better managed by project owners vs. the contractor. In conclusion, project owners are beginning to adapt to the changing project and contracting landscape in the GCC, by adopting ‘new times, new thinking’ contracting strategies that are more closely tailored to the nature of the project, to the contractor’s cash flow requirement and to their risk appetite. Doing so will contribute to helping them secure the contractors best fit for the job at the right price. However, they will also be required to plan early mitigation strategies for some of the risks associated with this new strategy.
Sweet Spot?
Q1 2007
Q3 2007 Q1 2008 Q3 2008
Execution
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Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011
Future Tier 1
Future Tier 2
Q3 2011 Q1 2012 Q3 2012
To further discuss how the Contax Partners Business Advisory team can help you plan for and execute your projects successfully, please contact Ann-Marie Carbery Antoun at AnnMarie.Carbery@ contaxpartners.com. We look forward to speaking with you.
Future Tier 3
Refining & Petrochemicals Middle East April 2010
16 Gas to Liquids Technology
GTL TAKES FLIGHT With sound environmental credentials GTL blended fuels could take the aviation market by storm. Qatar has taken an early lead and is using GTL kerosene blend as fuel for its national carrier
Refining & Petrochemicals Middle East April 2010
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Gas to Liquids Technology 17
M
onetising the region’s ample gas reserves is a critical mission for local downstream producers, and gas to liquids technology is transforming business opportunities and breaking into the fuels market, including jet fuel blends. Through integrated petrochemical projects and gas to liquid plants local governments have started looking into different options to take advantage of the abundance of natural gas. Saudi Arabia has opted to go down the integrated petrochemicals and refining route,
providing producers with subsidised feedstock at the cost of $0.75 per million BTU. However, Qatar is leading the region in terms of its GTL projects. The small Gulf state has announced six major projects with foreign partners. “The Pearl GTL project with Shell will be the first world-scale GTL plant,” says Alan Troner, president of Asia Pacific Energy Consulting. Pearl GTL is an integrated project including the giant onshore plant but also the development of natural gas resources from the North Field (two platforms, 22 wells, pipelines to shore). “Pearl encompasses the whole chain from producing natural gas from the North Field to exporting high quality finished
products that create value for Qatar and Shell,” says Andy Brown, Shell’s executive vice president. The investment in Pearl GTL is $18bn-$19bn. While in petrochemicals the cost of gas is critical to determine the profitability of the project; in GTL, the cost of gas is relative to three factors explains Troner. “What NGLs (LPG and condensate) are gained from gas production, what is the premium that GTL-derived products can gain on quality over conventional products, and their blending synergies with condensate-derived product and GTL output, and will GTL be sold as higher value blendstock?” he says. GTL producers can also capture and additional revenue stream through the
FIRST FLIGHT WITH GTL
“THE OPERATING COSTS OF PEARL GTL AS A WHOLE WILL BE $6 PER BARREL. THE INVESTMENT IN PEARL GTL IS $18BN-$19BN” ANDY BROWN, EXECUTIVE VICE PRESIDENT, SHELL
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Qatar Airways completed the world’s first commercial passenger flight between Doha and Heathrow, powered by a fuel made from natural gas in October 2009. Shell developed and produced the 50-50 blend of synthetic Gas to Liquids (GTL) kerosene and conventional oil-based kerosene fuel.
Refining & Petrochemicals Middle East April 2010
18 Gas to Liquids Technology
production of natural gas liquids. Also, the condensate produced with gas can be processed to provide basestock for blending fuels. The Fischer Tropsch process, which is used to transform gas into liquid products, has been in use since 1920s. “Essentially you combine methane and oxygen to make hydrogen and carbon monoxide,” says Brown. “You then pass this over a proprietary catalyst to make long-chained waxy hydrocarbon molecules. Shell has spent over 35 years researching gas to liquids technology and during that time we have filed over 3 500 patents,” he explains. GTL plants not only add value, but are capable of producing output which can be sold or blended into refinery stock as superior products with less pollutants for which there is growing demand. “With GTL, you can produce everything that a conventional refiner can manufacture other than gasoline, as the naphtha yield is very highly paraffinic (99% + paraffins),” explains Troner. “Most GTL products, as they emerge in outturn have a specific quality problem which needs modification through additives or by blending with conventional fuel. GTL jet fuel
GTL KEROSENE The Pearl GTL project will produce around 1 million t/y of GTL kerosene starting 2012, enough to power a typical commercial airliner for half a billion kilometres (equivalent to carrying 250 passengers around the world 4 000 times) when used in a 50% blend to make GTL Jet Fuel. GTL Jet Fuel, with GTL kerosene up to 50%, was fully and unconditionally approved as safe for use in civil aviation by the American Society for Testing and Materials)
Qatar Petroleum GTL projects: Oryx GTL Project Pearl GTL Sasol Chevron GTL ExxonMobil GTL Marathon GTL ConocoPhillips GTL
Refining & Petrochemicals Middle East April 2010
Pearl GTL will produce 140 000 bpd of GTL products in addition it will produce 120 000 bpd of natural gas liquids and ethane.
traditionally failed on freeze point, but Shell claims to have overcome the issue,” says Troner. Another use for GTL fuels is in the manufacture of blended diesel fuels. “Automotive diesel oil (ADO) often was both too light and had lubricity problems where the first you can overcome by blending, the second by using additives,” he adds. Since GTL-derived naphtha is so highly paraffinic, it cannot be used for gasoline manufacture. Pearl GTL will produce 140 000 barrels per day of GTL products. In addition it will produce 120 000 barrels per day of natural gas liquids and ethane. Qatar’s energy minister Abdullah bin Hamad Al Attiyah said recently that the Pearl GTL is almost complete, with major construction expected to be finished by the end of this year. Production will ramp up during 2011. As the final products of the GTL are liquid products, requirements to store or to transport these products are identical to conventionally-derived oil products. “You can use standard oil product tanks for your GTL outturn but paying careful attention to segregation and the fact that you do not want to contaminate this high quality GTL-derived products,” says Troner. “Condensate can be stored in standard crude or product tanks and like GTL can use standard tankers. LPG of course needs refrigerated or pressurized containment,” he adds. GTL fuels offer lower harmful emissions than their conventionally-derived alternatives. Given the precedent set with the growing
demand for LNG largely for stationary applications, demand for GTL fuels should be anticipated to grow firmly, notably for diesel fuels with the growing emphasis and legislation for low sulfur and aromatic fuels in Europe and the US. The Pearl GTL project is expected to produce one million t/y of GTL kerosene starting from 2012. But with all these promising outlooks, any future plans to establish a new GTL plant will need very large and wet gas reserves that are sold at a reasonable price to be able to create large-scale GTL. “This means a long-term commitment by the host country that will not change,” says Troner. While Qatar is taking the lead in this domain, the obvious candidates are Iran, Nigeria and Russia. “All these countries have high political risk and an uncertain future energy policy on gas,” concludes Troner.
Andy Brown, executive vice president, Shell.
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Official Show Daily Publisher
THE 3RD SAUDI ARABIA INTERNATIONAL OIL & GAS EXHIBITION & CONFERENCE 10–12 OCTOBER 2010
Join the exhibitors of the largest oil & gas event in Saudi Arabia WWW.SAOGE.ORG
DAMMAM, KINGDOM OF SAUDI ARABIA
20 Gas Detection
Safe operations in reďŹ nery plants require cutting edge gas detection equipment.
John Warburton, City Technology.
Refining & Petrochemicals Middle Eastt April 2010
ww w www.arabianoilandgas.com ww.a ww .ar arrabi a ab a bia bi an noila oiilila oil o an nd n dgas ga g a ass..co .c co c om
Gas Detection 21
Millennium II series of gas detectors from Net Safety can cover more area with a single transmitter and mix and match all sensor types.
protection against know specific hazards in a particular area of the plant or facility. “As they are life safety critical detectors, both types of instrument have to be independently certified to meet international safety and perfor performance standards, must be easy to use, robus robust and reliable,” explains Warburton. “For portable instruments in particular, they m must be ergonomically designed and ligh lightweight so that they are easy and unobtru unobtrusive to wear.”
Thresholds Occupational Exp Exposure Limit (OEL) values are set by the rele relevant health and safety has jurisdiction in the executive which h particular country or area or they are often defined in interna international standards. The limits depend on the nature of the hazard. “For toxic gases, a Time Weighted Average (TWA) will set th the limit, typically over an eight-hour perio period, for prolonged exposure to a low conce concentration of the gas in question,” Warburton. “In tandem with the TWA, a Short Time Expo Exposure limit (STEL) is usually defined, setting the maximum
ww www www.arabianoilandgas.com ww.a ww .ar arrab a abi bian b anoilandga
“DEFINITIONS FOR MAXIMUM EXPOSURE CONCENTRATIONS OF TOXIC GASES VARY FROM COUNTRY TO ANOTHER” ANDY AVENELL, MANAGER, CROWCON DETECTION INSTRUMENTS period for which people can be exposed to a higher concentration, usually measured over 15 minute intervals,” adds Warburton. For potentially explosive atmospheres, limits are normally expressed as a percentage of the Lower Explosive Level, (LEL) the level above which a gas mixture is capable of combustion. “The
instruments will be programmed to alarm at a level well below the maximum permissible so as to give time for evacuation or plant shutdown to be initiated,” explains Warburton. There are many international standards which dictate the threshold. “In the UK health and safety executive (HSE) publishes a document called EH40 which
Camera’s are used to detect leakage
Refining & Petrochemicals Middle East April 2010
22 Gas Detection
The 4CF+ carbon monoxide sensor and the 4HS+ hydrogen sulfide sensor provided by City Technology.
defines the workplace exposure limits (WELs) for toxic gases,” says Avenell. “In the US OSHA (occupational safety and health administration) publishes permissible exposure limits (PELs). Both standards are referred to in the Middle East depending on country and client,” he adds.
Environmental factors The key requirements for any gas detection instrument are the ability to operate within acceptable tolerances over wide variations in temperature and humidity. “Environmental factors relating to sensor performance, legacy and future system requirements, approvals and certifications required within the installation, and true cost-of-ownership are the main elements
50% The energy and refining sector accounts for around half of all regional gas detector sales. Source: City Technology report.
Refining & Petrochemicals Middle East April 2010
that buyers should look when adopting a gas detector,” says Jonathan Saint, manager at Net Safety. The performance of any instrument can only be as good as the performance of its core sensors; hence the segmentation of the market into specialist sensor designers and manufacturers and instrument providors. “Globally, the oil and gas and petrochemical industry is responsible for around 40 - 50% of demand for fixed and portable gas detectors,” says Warburton. In the Middle East, given the significant concentration of production and downstream facilities in the region, the petrochemicals industry is by far the largest user of such equipment. “ Changes in demand for gas detectors from the industry are directly related to activity levels – the more oil that is being pumped and processed, the larger the number of people needed to implement the processes and the higher the requirement for safety equipment,” he explains. As more plants come onstream in the Middle East, gas detector providers remain excited by the opportunity landscape in the region. “There is still a lot of activity here, and we provide vital tools,” says Saint.
Johan Tegstam, product manager, FLIR Systems.
LATEST RELEASES City Technology 4CF+ and 4HS+ The latest sensors to be launched by City are the 4CF+ carbon monoxide sensor and the 4HS+ hydrogen sulfide sensor, both widely used in single and multi-gas detection instruments. The latest designs build on the feedback gained from the ten million devices in the field to offer significantly reduced calibration times, improved reliability, reduced sensitivity variation between devices and complete backwards mechanical compatibility with previous generations. Crowcon’s TXgard IS+ This gas detector from Crowcon is fitted with electrochemical sensors which enable it to detect a wide range of toxic gases and oxygen levels. Gases detected include those most commonly found in industrial applications such as carbon monoxide (CO), hydrogen sulphide (H2S), chlorine (Cl2), ammonia (NH3), nitrogen dioxide (NO2), sulphur dioxide (SO2) and oxygen (O2).
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24 Multipoint Temperature ProďŹ ling
REACTOR WATCH
Multipoint M ulltipoint assemblies assse emblies enable ena able 3D temperature temperatture e profiling pro ofiling of process react reactors torrs
A
range of multipoint temperature assemblies is now available from Okazaki manufacturing Company (OMC), which is suitable for all types of process applications, including crude oil storage tanks, hydrocarbon cracking units, chemical reactors and desulphurisation catalyst bed reactors.
Refining & Petrochemicals Middle East April 2010
Most catalyst bed reactors operate at very high pressures and temperatures, making the vapour generated potentially very dangerous. The design of the reactor and multipoint temperature assemblies are therefore critical to safe plant operation. The reactors are between 3 m and 6m in diameter, and are between 10m and 4 0m
high. For optimal process operation, the temperature needs to be controlled and monitored accurately and fast, as well as three-dimensionally at multiple pre-set levels within the reactor catalyst filling. It is therefore preferable to have a minimum number of entry nozzles, or to utilise existing nozzles when upgrading.
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Multipoint Temperature Profiling 25
“For chemical reactors and desulphurisation catalyst bed reactors, OMC’s AerOradial range of multipoint temperature assemblies is ideal. This assembly offers the maximum number of temperature measurement points through a single process connection or entry nozzle,” explains Chris Chant, business development manager at Okazaki Manufacturing Company. “OMC utilises its own AerOpak mineral insulated cables, providing single tip measurement or multiple sensing points within a single stem. This enables full, three-dimensional temperature profiling, which ensures safe control of the process with a fast thermal response,” says Chant. Assemblies can be positioned through the side, top or bottom of the reactor vessel, with adjustable spacers for catalyst tubes or with an optional mounting system for fitting to the reactor. To ensure the pressure seal is maintained on the assembly, OMC uses a special welding technique known as ‘orbital seal welding’. Here, the sensors are welded into custom-designed pressure containment chambers. These chambers can be fitted with pressure gauges or transmitters, which indicate any safety problems such as a primary seal failure. “Our range of multipoint temperature assemblies is comprehensive and all designed and manufactured in our Japanese plants. Most of the units we supply are in stainless steel, but we also offer assemblies in exotic materials such as Alloy 600, 625, 825 or Hastelloy X. Some of our designs are fitted with smaller diameter sensors or a thin-walled guide tube and machined tips, to enable the sensor to be replaced while the process is
the safety, interchangeability, response times and accuracy of the assembly. Typical assemblies include guide tube systems and heat transfer blocks. Flexible versions are also available for installation around bends and can be fitted from the underside of tanks.
Middle East Focus
Temperature monitoring is crucial for efficient operations.
still running, minimising production downtime for the customer. We even offer full site supervision of the installation if the customer requires this.” OMC multipoint temperature sensors and termination glands are fully certified as a combined pair to Exde IIC T6 standards, for termination into a suitable enclosure, which can be mounted directly on top of the assembly or remotely at a more suitable attachment point. OMC’s range of multipoint temperature assemblies also includes standard multipoint assemblies for storage tanks and vessels. Depending on the customer application, multiple special features can be added to the standard unit to improve
Chant says that whilst the recessionary period saw local project schedules slow down, activity in the Middle East remains rampant compared to other markets worldwide. “Ultimately refineries and chemical plants are still working, and from a maintenance point of view these overhaul or upgrade projects must go ahead whatever. In this region we did see a lot of slow-down on the big projects – crucially not cancelled, but slowed considerably,” Whilst big-ticket projects have been pushed through in the Middle East, Okazaki’s customer profile has undergone a considerable shift in recent years. “You only have to go back a few years ago and we would have expected to do most of our business from the traditional big American and European contacting firms, but that has definitely shifted more towards the South Korean companies,” Thanks to major downstream projects in the United Arab Emirates and Saudi Arabia, Chant says the region is phenomenally busy. There are some great projects ongoing in the Middle East, such as the Ruwais Refinery Expansion (budgeted at around US$9.6 billion), so the region is certainly still exciting and buoyant,” he concludes.
SNAPSHOT
“YOU ONLY HAVE TO GO BACK A FEW YEARS AND WE WOULD HAVE EXPECTED TO DO MOST OF OUR BUSINESS FROM THE TRADITIONAL BIG AMERICAN AND EUROPEAN CONTACTING FIRMS, BUT THAT HAS DEFINITELY SHIFTED MORE TOWARDS THE SOUTH KOREAN COMPANIES”
Okazaki Manufacturing Company (OMC) was founded in 1954 and started the design and manufacture of temperaturerelated products in Kobe, Japan. In 1963, OMC developed Resiopak, a metalsheathed MgO insulated resistance thermometer now used for temperature measurement within the petrochemicals industry globally.
CHRIS CHANT
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Refining & Petrochemicals Middle East April 2010
26 Middle East Downstream Week Mohamed Hassan Mezal, manager, Bapco.
Saadalla Al Fathi, independent oil consultant, Iraq.
DOWNSTREAM WEEK Meeting Euro 5 standards and operating efficiently drove the agenda in Abu Dhabi
M
iddle East Downstream Week (MEDW), organised by World Refining Association, attracted major regional players who flocked to Abu Dhabi to discuss the major issues and challenges facing the refining and the petrochemical sectors. The event was also an opportunity for international technology providers, software and EPC contractors to showcase their latest products and solutions, as well as to network with decision makers of the NOCs. Delegates from Saudi Aramco, Abu Dhabi Oil Refining Company (Takreer) and Abu Dhabi National Oil Company (ADNOC),
Refining & Petrochemicals Middle East April 2010
Kuwait Oil Company, Bahrain Petroleum Company (Bapco) and other delegates from different countries of the Middle East gathered in the UAE capital. Meeting the Euro 5 standards, which dictate the reduction of sulphur content to 10ppm in diesel and gasoline, was the common issue facing refinery operators in the region; while other speakers focused on the refining sector in different Middle
Eastern countries, with country specific presentation from Saudi Arabia, Bahrain, UAE and Iraq. In his presentation on refining investment in arab countries, Imad Nassif Makki, petroleum refining expert from the Organisation of Arabic Petroleum Exporting Countries (OAPEC), presented a paper on the challenges facing refiners in the Middle East. “Arab refining capacity represents 8%
“ONLY 23% OF THE ANNOUNCED REFINING PROJECTS IN THE ARAB WORLD ARE ACTUALLY UNDER CONSTRUCTION” IMAD NASSIF MAKKI, OAPEC www.arabianoilandgas.com
Middle East Downstream Week 27
Salem Shaheen, president and CEO of SATORP.
the world’s total capacity,” he said. “Replacing low efficiency and simultaneously meeting growing demand whilst maximising high value products are the principal challenges for local refiners,” he noted. Makki said that 51% of the announced refining projects in the Arab world have been delayed, while 26% have been shelved. “Only
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23% of the Middle East’s ’s proposed refi refining ning projects are under construction.” Mohamed Hassan Mezal, manager of the refinery operations planning at Bapco, gave an insight into the refining operations at his country, where he raised the issue of meeting the Euro 5 standards within Bapco’s refinery in Bahrain. This is a particularly
ers flocked to Technology provid Dhabi event. u Ab the
accute challenge for Bapco as 90% of the company’s products are destined for export to international markets. Delegates from Saudi Arabia discussed government initiatives to increase the use of diesel in the domestic market “The absence of incentives and the low cost of benzene in Saudi Arabia are the main reason behind low
Refining & Petrochemicals Middle East April 2010
28 Middle East Downstream Week
Imad Nassif Makki, OAPEC.
diesel penetration in transportation,” said a delegate from Saudi Aramco. “In Aramco, we are working on increasing the utilisation of diesel instead of benzene,” he added. Salem Shaheen, president and CEO of Saudi Aramco Total Refining and Petrochemical Company (Satorp), said that by 2014 diesel produced in the Kingdom will be of 10 ppm instead of the current 500 ppm. “Most of Aramco refineries will be producing 10 ppm quality diesel,” he said. Shaheen also revealed that Aramco decided that all new refining projects should be integrated projects, which include petrochemicals and refinery plants on the same site to increase profitability. Saadalla Al Fathi, and independent oil consultant and former advisor of Iraq’s Ministry of Oil, spoke about current and propsed Iraq refinery development. Al Fathi noted that among the four announced new refineries, only two are likely to go ahead. “Kirkuk and Misan refineries won’t see the light of day,” he said. “Iraq needs a master
Refining & Petrochemicals Middle East April 2010
ortunity to The event was an opp peers. ry ust ind h network wit
plan for modernisation n and expansion of its refinery industry, but the proposed private investment law doesn’t give the necessary incentives for investors,” Al Fathi said. On the other hand, technology and EPC contractors presented the latest solutions and technology options that help companies
to run more effi efficiently ciently. “Overall the Middle East Downstream Week event was a great opportunity for networking, and discovering new opportunities within the refining and petrochemical sector,” said Yassir Ghiyati, sales manager at catalyst specialist Haldor Topsoe.
Delegates from major NOCs attended the event.
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MEP10_Ad_265x200.pdf
C
M
Y
CM
MY
CY
CMY
K
1
28/3/10
2:03 PM
30 Number Cruncher
Downstream Data
Most listed petrochemical companies saw share prices improve through March. Recovering demand from Asia is starting to filter through to better expections. LISTED COMPANIES IN THE SAUDI STOCK MARKET Price on Feb,19th (US$ per share)
Price on Mar,19th (US$ per share)
Change %
Saudi Basic Industries Corporation (SABIC)
23.73
25.80
8.01
Saudi Arabian Fertilizer Company (SAFCO)
36.40
38.33
5.04
Saudi Kayan Petrochemical Company (Kayan)
4.88
5.05
3.43
Rabigh ReďŹ ning and Petrochemical Company (Petrorabigh)
8.80
9.33
5.71
Yanbu National Petrochemical Company (YANSAB)
9.97
9.47
-5.32
National Industialization Company (TASNEE)
7.52
7.71
2.42
Saudi Industrial Investment Group (SIIG)
5.88
5.81
-1.15
Saudi International Petrochemical Company (SIPCHEM)
6.16
6.33
2.74
Sahara Petrochemical Company (SAHARA)
5.65
5.89
4.13
Advanced Petrochemicals Company (Advanced)
6.28
6.03
-4.20
Nama Chemicals Group (NAMA)
2.64
2.79
5.26
Alujain Corporation (ALUJAIN)
4.49
4.59
2.11
Methanol Chemicals Company (CHEMANOL)
4.04
4.23
4.42
Petrochem
4.13
4.08
-1.31
LISTED COMPANIES IN THE KUWAITI STOCK MARKET Price on Feb,19th (US$ per share)
Price on Mar,19th (US$ per share)
Change %
Qurain Petrochemical Industries Company (AL-QURAIN)
0.71
0.70
-1.00
Boubyan Petrochemical Company (BOUBYAN)
1.79
1.96
8.93
Ikarus Petroleum Industries (IKARUS)
0.47
0.51
8.22
LISTED COMPANIES IN THE QATARI STOCK MARKET Price on Feb,19th (US$ per share) Industries Qatar
30.13
Price on Mar,19th (US$ per share) 30.74
Change % 1.99
LISTED COMPANIES IN THE OMANI STOCK MARKET Price on Feb,19th (US$ per share) Oman Chlorine S.A.O.G. (CHLORINE)
1.01
Price on Mar,19th (US$ per share) 1.02
Change % 0.26
LISTED COMPANIES IN THE EGYPTIAN STOCK MARKET Price on Feb,19th (US$ per share)
Price on Mar,19th (US$ per share)
Change %
Abu qir Fertilizers
41.67
40.00
-4.17
Sidi Kerir Petrochemicals Company
2.32
2.44
5.04
Refining & Petrochemicals Middle East April 2010
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Number Cruncher 31
1250 1150
800
1050 950
CFR: Cost and Freight
1400
PPF (CFR FAR EAST)
06/03/10
30/01/10
PROPYLENE (FOB FAR EAST)
1300 1200
1220
1100
1120
US$/tonne
US$/tonne
26/12/09
FOB: Freight On Board
1420 1320
14/11/09
11/10/09
06/09/09
03/08/09
06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
29/06/09
550
27/05/09
300
22/04/09
650 18/03/09
400 11/02/09
750
07/01/09
500
29/06/09
850
27/05/09
600
22/04/09
700
18/03/09
US$/tonne
900
Benzene prices ďŹ rmed up during March at around $950 per tonne amid slight increases in crude values to above $80/bbl.
ETHYLENE (FOB FAR EAST)
11/02/09
1000
US$/tonne
1350
BENZENE (FOB FAR EAST)
07/01/09
1100
1020
MEG prices bounced back to the level of $900 per tonne. Trades remain thin on the ground as sellers hung on for richer pickings in Q2.
1000 900 800
920
700 820
900
1150
800
06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
29/06/09
27/05/09
18/03/09
22/04/09
06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
29/06/09
22/04/09
18/03/09
27/05/09
06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
29/06/09
27/05/09
06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
400
29/06/09
750
27/05/09
500 22/04/09
850 18/03/09
600
11/02/09
11/02/09
07/01/09
700
950
07/01/09
Polypropylene prices remained stable at around at around $1300 per tonne, as traders assessed the impact of the new capacities coming from the Middle East on the market.
22/04/09
1050
18/03/09
US$/tonne
1250
(CRF FAR EAST)
MEG
1000
07/01/09
1350
11/02/09
HDPE (CFR FAR EAST)
Propylene prices edged higher to above $1260 per tonne as supply was limited. Polyethylene prices declined to below $1300 per tonne due to the decline of the ethylene feedstock, and the uncertainty of the outlook of the PE prices.
11/02/09
US$/tonne 06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
29/06/09
27/05/09
22/04/09
NAPTHA
07/01/09
06/03/10
30/01/10
26/12/09
14/11/09
11/10/09
06/09/09
03/08/09
29/06/09
27/05/09
22/04/09
07/01/09
18/03/09
18/03/09
11/02/09
07/01/09
850 800 750 700 650 600 550 500 450 400 350
1100
1450
US$/tonne
500
PVC (CFR FAR EAST)
US$/tonne
1100 1050 1000 950 900 850 800 750 700 650 600
11/02/09
600
720
Ethylene prices dropped to around $1100 per tonne as buyers held off contracts to ascertain the impact of new cracking capacity in Southeast Asia which has recently come on stream.
PVC posted marginal gains reaching $1040 tonne, with further gains expected in April.
(HDPE Injection)
Source: www.argaam.com
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Refining & Petrochemicals Middle East April 2010
32 Downstream Diary
DUBAI PLAST PRO 2010 Scheduling clash blamed for poor turnout, though international visitors hailed show’s quality
Ruya Bayegan, board member of Bayegan Group.
(Left to right) Peter Steylaerts of Ineos, Ibrahim Shahbahai of PetroRabigh, Fahad Al-Matrafi of APC.
Bob Davies, sales manager, Akzo Nobel.
The panel fostered debate in the plenary sessions.
Giangi Townsend, AsiaTek Industrial Packaging.
wasted between harvest and home. In a packaging-oriented society, wastage is reduced to around 3%,” he said. Recent proposed legislations in the UAE and Oman to ban the use of plastic bags was discussed. Most producers felt their product was being blamed, when in fact behavior and education should be the solution. The exhibition element saw Turkish petrochemical distributor Bayegan Group showcasing its services, and touting its ambitions to bring 70 years of experience to the Middle East. “The event is an excellent place to network with all the delegates and
explore new investment opportunities,” said Ruya Bayegan, a company board member.
D
espite an awkward clash with Downstream Week in Abu Dhabi, The 13th edition of Dubai Plast Pro managed to draw a strong turnout from regional producers and plastics converters from across Europe and Asia. Though attendance was down 30% on last year’s event the conference sessions and panel discussions remained as strong as ever. Petri Lehmus, innovation center manager at Abu Dhabi’s Borouge, raised the issues of innovation and growing the plastics packaging industry in world. “In the less developed world, up to 50% of all food is
Refining & Petrochemicals Middle East April 2010
DON’T MISS Event: Petrotech 2010 Date: 23– 26 May Location: Bahrain International Exhibition Centre Covering: Downstream challenges, financing, market changes and technology
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