Qatar to double petrochemicals production until 2020
On December 23rd 2012, Qatar established a new company, the Qatar Chemical and Petrochemical Marketing and Distribution Company (MUNTAJAT) Q.J.S.C., to lead the strategic development of the country on the downstream sector.
In creating this corporation, Qatar is targeting to more than double the chemical and petrochemical production from the current 10 million tonnes to 23 million tonnes in 2020.
While being the world largest exporter of liquefied natural gas (LNG), Qatar started some years ago to diversify its economy with polymers, chemicals and fertilizers production directly based on natural gas feedstock.
In parallel the development of the shale gas in the USA impacted not only the natural market itself but all its downstream applications motivating global companies to relocate in USA their chemical and petrochemical projects.
With Henry Hub natural gas prices fluctuating between $3.0 and $3.5 per million Btu, the US market reduced significantly the competitive advantage given to the Middle East producing countries.
In addition, except Qatar and Iraq, most of the countries in the Gulf are already struggling with gas shortage to meet their own ballooning energy consumption.
The response came with the publication of the Emir Decree N°11/2012 to create a single entity under the name of Muntajat with the mission to hold exclusive rights to:
– Sell and export
Through one name and one company, the intention is to:
– Streamline operations
– Benefit from scale savings on logistic along the export supply chain supported by regional storage facilities.
– Open 36 distribution offices in key locations to cover better the local markets.
Qatar to invest $25 billion in petrochemical until 2020
With this single organization to cover more than 120 countries, Qatar expects to:
– Multiply business opportunities for its products portfolio
– Improves responsiveness to global demand
– Identify faster new need for further expansion projects.
Some of major projects are already taking momentum to support Muntajat further growth with:
To highlight the importance of this initiative for Qatar, HE Dr Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry will seat as the Chairman of the Board of Directors of the newly formed Muntajat company.
This initiative is part of Qatar vision 2030 to build a sustainable diversified economy by then.
In this perspective Qatar declares the decade as “Chemical and Petrochemical”.
Until now, the downstream sector was the add-on the LNG export business, the vision 2030 is to adjust upstream capacities to the future needs for transformation of raw gas into high added value hydrocarbon products.
To achieve the implementation of this new integrated upstream–downstream business model at the same pace as USA, Qatar will need the support of major companies such as Shell, Total and likely Chinese.