Initial estimate for Olefins third project $8-9bn

Kuwait's state-run Petrochemical Industries Co. (PIC) said that the initial estimates for the petrochemical Olefins III project, it intends to pursue, point to the USD 8-9 billion range. A final estimate cannot be determined at present, said Deputy Managing Director of Olefins for the Petrochemical Industries Company Yousef Al-Ateeqi. After Fluor Corporation completed feasibility studies in 2011, results look encouraging for the start of the project, with PIC to start one of a number of steps - the first of which will be to start assessing international partners who will be taking part in the project, Al-Ateeqi told PIC's official in-house zine. Other steps include locating substitute land for the project, with a proposal ruled out that it be within the bounds of a new refinery Kuwait is constructing, as there are several obstacles preventing this, with the company opting instead to search for a nearby location. As for deciding the type and quantities of the materials that will be used in the manufacturing process - particularly gas - he said PIC was discussing this with its umbrella company, Kuwait Petroleum Corporation (KPC), in addition to when these materials will be provided. And whether delaying the implementation of the project would cause a cost increase, Al-Ateeqi said that this could not be the case as it is linked to "market conditions". He did stress however, that any delay would not be favourable as it would lessen revenues that mat arise out of this project if it were to begin being functional at an earlier date. He noted that the Olefins sector witnessed several achievements in the past year, in the midst of the completion of the Sigma 6 project, which will improve efficiency. "We are also studying production opportunities outside of Kuwait, but nothing has materialised as of yet," he added. He added that company has plans to expand in other operations, but that the scarcity of land in Kuwait is an obstacle to these plans and the industry sector as a whole. On the company's project in China, Al-Ateeqi explained that the feasibility of the project represents an integration between the refinery and the petrochemical complex, pointing out that if a delay were to occur, this would lead to results being limited, and thus the company would not enter the project. The project is divided into two sections - an oil refinery and a petrochemical complex - while the Chinese side are carrying out their role on the refinery aspect of the project in "a more advanced pace", and are about to begin the process of construction, he said. On the other hand, the petrochemical facility is facing some delay and this has led to ongoing talks between both sides, on the need for both projects to move hand-in-hand in terms of progress, otherwise, "the project's economic feasability will not be achieved." On another project in Vietnam, he said it is witnessing progress, since the implementation will begin soon with the signing of contracts aimed at construction, and adding that PIC's role will be limited to marketing the facility's product, polypropylene. Al-Ateeqi held an optimistic view on the future of the petrochemicals market, suggesting a more encouraging outlook over the next three years, and expressing confidence both the Olefins III and Vietnam projects will do much to expand the company's operations internationally - in entering promising markets like Africa.