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Kuwait’s PIC Plans $10 Billion Projects in Four Years

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Aug. 3 (Bloomberg) -- 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.

“We’re targeting 1.4 million tons of ethylene” annually from the Olefins III plant, Hussain said. “Going downstream, there will be some ethylene-glycol, polyethylene, polypropylene, depending on the mix of feed. We’re targeting a world-scale capacity for those units.” Olefins III is expected to be operational in 2016, she said.

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 U.S. 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.

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

This year “will be similar to 2009” for the petrochemicals industry, when the global financial crisis eroded demand and lowered prices, Hussain said. “Things are reviving, we see some prices coming up but we don’t expect it to be better than 2009,” she said.

PIC, a unit of state-owned Kuwait Petroleum Corp., is considering expanding aromatics projects. “We are now thinking of going downstream from the paraxylene, we have a preliminary study going on,” Hussain said. The company is also seeking growth in areas where there would be opportunity for feedstock, possibly in Yemen, Algeria, Libya or Asia, she said.

To contact the reporter on this story: Fiona MacDonald in Kuwait at fmacdonald4@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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