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Tue 3 Aug 2010 04:38 PM

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Kuwait’s PIC plans projects worth $10bn over 4 yrs

Petrochemical Industries Co to build a third mixed-feed olefins $5bn facility.

Kuwait’s PIC plans projects worth $10bn over 4 yrs
(Getty Images)

Petrochemical Industries Co plans projects worth $10 billion over the next four years as the Kuwaiti company that canceled a venture with Dow Chemical Co seeks to expand its operations at home and abroad.

PIC plans to build a third mixed feed olefins facility to make chemicals used in plastics production at a cost of “more or less” $5 billion, chairwoman and managing director Maha Mulla Hussain said today in an interview at the company’s headquarters south of Kuwait City.

Hussain said: “We’re targeting 1.4 million tons of ethylene” annually from the Olefins III plant. Going downstream, there will be some ethylene-glycol, polyethylene, polypropylene, depending on the mix of feed.

She added: "We’re targeting a world scale capacity for those units.” Olefins III is expected to be operational in 2016.

PIC’s share in a proposed refinery and petrochemical complex costing about $9 billion in China’s Guangdong province is also part of the company’s projects, Hussain said.

Kuwait is expecting approval from the Chinese government by the end of the year for the complex, for which it is partnering with China Petroleum & Chemical Corp. The Chinese refinery complex is expected to be operational in 2015, according to Hussain.

Kuwait in December 2008 canceled a joint venture with Midland, Michigan based Dow Chemical Co, the biggest US chemical company. Dow and PIC remain in arbitration over the failed plastics venture, known as K-Dow, a Dow spokesman said last January.

Dow is entitled to $2.5 billion for the failed venture, Chief Executive Officer Andrew Liveris said in 2009.

Currently, there aren’t any talks for any projects between PIC and Dow, which each hold a 42.5 percent stake in Equate Petrochemical Co.

Hussain said: “It could be there will be another opportunity, but not K-Dow.”

This year “will be similar to 2009” for the petrochemicals industry, when the global financial crisis eroded demand and lowered prices, Hussain said.

She said: “Things are reviving, we see some prices coming up but we don’t expect it to be better than 2009."

PIC, a unit of state owned Kuwait Petroleum Corp, is considering expanding aromatics projects.

Hussain said: “We are now thinking of going downstream from the paraxylene, we have a preliminary study going on."

The company is also seeking growth in areas where there would be opportunity for feedstock, possibly in Yemen, Algeria, Libya or Asia, she said.

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