Qapco output set to rise
Doha, February 28, 2008
Industries Qatar's chemicals unit said it expected to benefit this year from higher production and prices for its products, tapping rising demand in Asia.
Qatar Petrochemicals Co (Qapco), a venture with France's Total SA, also said construction of its third low density polyethylene (LDPE) plant, planned for next year, is likely to cost more than initially expected.
Output of ethylene, a base chemical used in making plastics and Qapco's main product, will probably rise about 38 per cent this year to 720,000 tonnes, compared with 520,000 tonnes last year after completion in August of a $230 million expansion of an ethane cracker, Qapco general manager Mohammed al-Mulla told Reuters.
"We are going to perform very well at all levels," Mulla said in an interview in the Qatari capital, Doha. "We are still ethylene and polyethylene producers, and there is huge demand."
Ethylene prices could rise 10 percent this year, Mulla said. "We are not expecting the price to go much higher than $2,000 a tonne ... The average price at the moment is $1,820."
Industries Qatar, which groups chemicals, fertiliser and steel-production businesses, last week posted its third consecutive record profit in the fourth quarter on higher prices. No details were given about the individual companies.
The company is the second-largest maker of chemicals by market value in the Gulf after Saudi Basic Industries Corp.
"Engineering, procurement and construction costs have risen by 25 to 30 percent this year on last year," said Mulla.
"If I award the contract at the end of this year, it will be more than now," Mulla said of plans to build the 250,000 tonnes per year LDPE plant. The project will cost 910 million riyals, according to Industries Qatar's Web site.
Mulla said he expected to approach banks later this year to help finance the project, but declined to give more details. Qapco sales rose almost 8 percent to 1.35 billion riyals in the third quarter, and profit rose 21 percent to 1.09 billion riyals. - Reuters