Al-Terkait says, however, that a lack of gas feedstock means that further expansion of the firm’s base chemical production will be unlikely.
“There will be no Equate III,” he says, referring to the possibility of a further expansion. “However, we are waiting to see how the new gas find in Kuwait pans out and how much of it will be available for the petrochemical sector. So far, there are no downstream products planned, but we would always consider them should the opportunity come up.”
Equate produces polyethylene and polypropylene, which are both widely used in consumer products, as well as ethylene glycol, which is used as an antifreeze.
The lack of feedstock is a growing problem for the regional petrochemical sector. As supplies of cheap ethane dry up, producers are increasingly looking to other feedstocks such as natural gas liquids or naphtha. However, Al-Terkait says that integrating Equate with a refinery or using naphtha feedstock was not under consideration for now.
The multi-billion-dollar Olefins II expansion is due to be commissioned in late summer 2008, with the associated aromatics plant coming on stream later, due to delays in the tendering process.
Al-Terkait adds that Equate may look to refinance the project. “We just got $2.5bn for Olefins II, which we will start paying back after operations have started,” he says. “If the situation looks good, we could consider refinancing like we did with the original Olefins I scheme.”
The main shareholders in Equate are the US’ Dow Chemical Company and the Petrochemical Industries Company, part of state-owned Kuwait Petroleum Corporation.