Kuwait expects to complete a feasibility study for a planned third olefins cracker in the country by the middle of 2011, with a final decision on the estimated $3bn scheme due by the end of 2011, says a source close to the scheme.

“It is still with PIC [state-owned Petrochemical Industries Company], but expect an announcement in 2011,” Hamad al-Terkait, president and chief executive officer of US/Kuwaiti joint venture Equate, told MEED on the sidelines of the Gulf Petrochemicals and Chemicals Association (GPCA) forum in Dubai.

Feasibility studies for the emirate’s third olefins project are under way, and should be completed in the first half of 2011, Al-Terkait added.

The company is a joint venture of the US’ Dow Chemical Company and three Kuwaiti firms – PIC, Boubyan Petrochemical Company and Qurain Petrochemical Industries Company. However, it remains unclear if Equate will be involved in the venture at all.

Kuwait’s petrochemicals sector has been hampered by a lack of gas, despite substantial discoveries in the last five years. Kuwait Petroleum Corporation (KPC) supplies gas to Equate plants, but faces competition for gas from the power sector. Given this, the proposed plant, which would produce ethylene, is expected to use a mixed ethane-naphtha feed.

Feedstock could possibly come from Kuwait’s Jurassic gas fields, suggests one source close to the scheme. UK-Dutch oil major, Shell signed an $800m enhanced technical services agreement with state upstream operator, Kuwait Oil Company (KOC) covering the development of Kuwait’s northern gas fields (MEED 14:4:10).