Algeria Petrochemicals Report Q4 2011

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Algeria Petrochemicals Report Q4 2011 Published on August 2011

Report Summary Short-term prospects for the Algerian petrochemicals market are modest due to slower growth in the economy, according to BMI's latest Algeria Petrochemicals Report. Algeria's chief petrochemicals trading partners, namely the Middle East and Europe, are ramping up production while their home markets are sluggish. As such, they are seeking export markets for growth and with the strong dinar Algeria is likely to be a target market. However, with GDP growth revised down from 4.2% to 2.9% in 2011 due to lower than expected hydrocarbons output and industrial growth remaining at just 1.5% per annum over the next five years, scope for sales will be limited. Nevertheless, the Algerian petrochemicals industry is narrowly focused with a low level of capacity and the country will remain dependent on imports. The start-up of the 1mn tpa methanol complex planned by Sonatrach and being built by a consortium of companies led by Kuwait's Qurain Petrochemical Industries Company (QPIC) has been pushed back to 2014. Sonatrach had planned to begin commercial operations in 2012, but restructuring of the company and its apparent desire to renegotiate its contract with its exasperated partners means that production will be delayed. As a result, costs could rise and BMI believes there is a danger that the project's capacities could be reduced. The move comes after the completion of the Arzew petrochemicals complex was delayed until 2014, ostensibly to coincide with a full recovery in the European market and avoid the negative effects of the massive increase in Asian and Middle Eastern capacities in 2009-2011. By tapping into locally available gas resources, the country's development of an ethane-fed petrochemicals chain will enable Entreprise Nationale de l'Industrie Petrochimique (ENIP), in its JV with Total Petrochemicals and Qatar Petroleum, to undercut European plants. With 1.1mn tpa of ethylene production capacity and integrated downstream plants and low labour costs, the US$3bn petrochemical complex being built at Arzew should be more economic and efficient to run than smaller and often isolated European facilities. Delays in capacity will not only raise costs and reduce margins in the long term, they will create a more uncertain business environment that will undermine the industry's progress and put at risk its significant cost advantages in terms of domestic natural gas feedstock availability. In the Middle East and Africa Petrochemicals Business Environment Ratings, Algeria is in 10th place with an overall score of 39.5 points, unchanged since the previous quarter. It lies 7.6 points behind Egypt and 8.7 points ahead of Nigeria. Meanwhile, its petrochemicals-specific scores are benefitting from progress on the Arzew petrochemicals complex, although delays are undermining the country's petrochemicals market risk score. On nearly every indicator, Algeria comes last by a long margin, except when Nigeria scores worse, and this is likely to remain the situation until the Arzew complex comes onstream.

Table of Content Executive Summary SWOT Analysis

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Algeria Petrochemicals Industry SWOT Global Petrochemicals Overview Financial Results

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Global Products Outlook

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Table: Oil Product Price Assumptions, 2011 (US$/BBL)

Algeria Petrochemicals Report Q4 2011 (From Issuu)

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>> Get this Report Now by email! Table: Oil Product Price Forecasts, 2011-2015 (US$/BBL) Africa Regional Overview

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Table: Africa's Gas Reserves, 2010 (bn cubic metres)

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Table: Africa's Oil Reserves, 2010 (bn barrels)

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Table: Africa's Cracker Capacity, 2009-2015 ('000 tpa) Algeria Market Overview

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Market Structure

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Table: Algeria Cracker Capacity, 2007-2014 ('000 tpa) Industry Trends And Developments Upstream

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Olefins And Polyolefin

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Table: Petrochemical Capacity At The Planned Arzew Complex Business Environment

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Petrochemicals Business Environment Ratings

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Table: Middle East And Africa Petrochemicals Business Environment Ratings Industry Forecast Scenario

Table: Arzew Complex Capacities, 2014 ('000 tonnes)

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Table ' Algeria Petrochemical Sector - Historical Data & Forecasts Macroeconomic Activity ..... 35 . 35

Glossary Of Terms

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Table: Glossary Of Petrochemicals Terms BMI Methodology

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Company Monitor Sonatrach

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How We Generate Our Industry Forecasts

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Chemicals And Petrochemicals Industry Cross Checks

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Business Environment Ratings

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Table: Petrochemicals Business Environment Indicators And Rationale Table: Weighting Of Indicators

Algeria Petrochemicals Report Q4 2011 (From Issuu)

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