Countries with gushing oil and gas wells are no longer content with simply extracting raw materials, but are increasingly investing in petrochemicals complexes and the production of basic chemicals. This offers chances, but also involves risks for major plant engineering and construction. PROCESS has been investigating: who are the winners and who are the losers?
The trend is evident: For quite some time, the action in large-scale plant construction has been in the emerging markets. This fact is underlined once again by recent research in the PROCESS database for plant engineering and construction GROAB, which provides information on diverse large-scale projects. In the last six weeks alone, six large-scale projects have been added, with project values between two and six billion Euros. The main region for these investments is clearly the Middle East — dominated by giant projects of the state-owned and semi-public petrochemical industry.
Petrochemical Industry Moves Towards the Hydrocarbon Reservoirs
Most of the money is currently going into refineries and integrated petrochemical complexes which process oil and gas into basic chemicals directly at the place of extraction. This development clearly shifts the value creation process into countries which, for many years, served only as providers of raw materials. And this is now true not only for the classical oil countries like Saudi Arabia or Qatar, where gigantic complexes such as Chemaweyaat or Ras Laffan are springing up out of the desert sand, but also for countries like Uzbekistan or Peru, which are not (yet) at the forefront of the producer countries.
The land in the Andes wishes to exploit its natural gas reserves more forcefully in the future, but still has problems with its sub-standard infrastructure. One of the model projects by the Peruvian firm CF Industries, a facility for the production of ammoniac and fertilisers, hung in the balance for some time as it was unclear how gas from the Camisea reservoirs was to be transported to the production location at St. Juan de Marcona.
Petrochemicals Projects Flourish in the Middle East
Developments in central Asia are pursued just as keenly, particularly in Uzbekistan: The largest single project is the construction of a gas/chemical complex at Ustyurt for an estimated US $ 3.5 billion. The names behind this projects are represented by a consortium of Uzbekneftegaz (50%), Korea Gas (22.5%), Honam (22.5%) and STX Energy (5%). In the complex, gas is to be processed into polypropylene and polyethylene. But also the Texan engineering, construction and services company KBR was able to secure a slice of the cake: The company was selected as a technology licensor for the ethylene cracker.
Most of these projects are actually a and executed by engineering firms from a comparatively small country – Korea could well become Asia's engineering partner of choice... More on page 2!
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