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US$2BN world-scale cracker for Saudi Arabia
June 2005
MARKET PROSPECTS
Pump Industry Analyst
global demand over the period. China now consumes 13.6% of the world’s total energy. Outside China, world energy demand rose by 2.8%, the fastest percentage increase since 1996 and approximately twice the rate of the previous two years. Oil consumption in 2004 up 3.4% - showed the fastest rate of growth since 1978. Rising Chinese demand accounted for over a third of this increase. Oil output also rose, exceeding 80 million bpd for the first time in 2004. Outside OPEC, production increased by 965 000 bpd in 2004, well above the 10-year average. Russian production once again rose fastest, with output up nearly 750 000 bpd. Angola, Chad, Ecuador, Equatorial Guinea and Kazakhstan were also key growth areas. In Iraq production increased by 677 000 bpd to 2 million bpd. World nuclear consumption grew by 4.4% in 2004 with recovery in Japan accounting for half of the growth. Globally, capacity and efficiency increased and US nuclear output grew 3.2% to its highest ever level. Global hydroelectric generation rose by 5% in 2004. Growth was strong in China, up 16.6% as new capacity came online, and in Europe and Eurasia, with recovery from drought and better rainfall. The BP Statistical Review of World Energy is available at www.bp.com/statisticalreview.
PULP & PAPER ANDRITZ EQUIPS URUGUAY PULP MILL Andritz Oy will deliver the main process equipment for Oy Metsä-Botnia Ab’s pulp mill currently being built in Fray Bentos, Uruguay.
4
The 200 million order covers a fibreline – from wood handling through to pulp drying – as well as a chemicals recovery system. The mill will produce one million t/a of eucalyptus pulp and cost approximately US$1.1 billion to build. Startup is scheduled for the third quarter of 2007. The mill’s main process equipment will represent the industry’s latest technology and will therefore ensure minimal environmental emissions, cost-effective production and the very highest quality pulp. The final contracts with the equipment suppliers will be signed during the next coming months, and further details will be announced then.
NEWSPRINT PRODUCTION SHUTDOWN AT NORSKE SKOG Norske Skog is to halt newsprint production from one of the paper machines at its Norske Skog Follum mill in eastern Norway. “We are not getting adequately paid because of the excess capacity in today’s newsprint market,” explained chief executive Jan Oksum. Paper machine (PM) 2 at Norske Skog Follum will be closed down on 1 July, and plans call for the production halt to last for the rest of this year.
CHINESE PULP MILL ORDERS METSO FIBRE LINE Metso Paper will supply a 13 million fibre line to Guizhou Chitianhua Paper Industrial Co Ltd in Guizhou province, China, for a greenfield pulp mill that will use bamboo. The mill will start up in March 2007 with a designed
daily production capacity of 750 tons fully bleached pulp based on bamboo. Metso Paper’s delivery will comprise main process machinery for knotting, screening, washing, oxygen delignification and bleaching. The order also includes engineering and site services.
PETROCHEMICALS FLUOR TO DESIGN, MANAGE SAUDI PETRO COMPLEX Fluor Corp will provide front-end engineering and design and project management consultancy services for the US$3.5 billion Jubail petrochemicals complex in Saudi Arabia. The multibillion-dollar petrochemical complex will be located in Al Jubail, Saudi Arabia. Once completed, the complex will include a 1.35 million-tons-per-year ethane/ butane cracker, a 950 000tons-per-year polyethylene plant, a polypropylene plant with capacity of at least 600 000 tons per year, a 530 000-tons-per-year ethylene oxide unit to support growing global demand for these consumer product precursors, and a 300 000-tons-per-year Bisphenol-A plant including phenol and cumene units. Additional derivative facilities will be installed for methylamines, ethanolamine, ethoxylates, butane-1, and benzene extraction. Agreements with Saudi Aramco for the supply of both ethane and butane feedstock are complete, along with permitting from the Royal Commission for the commercial use of land and water. Work on the project is already under way in Fluor’s Camberley, UK office. Site work is expected to start later
this year, with project completion scheduled for 2008.
US$2BN WORLDSCALE CRACKER FOR SAUDI ARABIA Innovene, BP plc’s petrochemicals and refining subsidiary, and Delta International, a Saudi Arabiaowned independent development company, have formed a joint venture to work on a major investment in Saudi Arabia’s petrochemical sector. The companies have signed a Memorandum of Understanding which should see Innovene and Delta work on the construction of a US$2 billion world-scale cracker and associated derivative capacity in the Jubail area of Saudi Arabia. Innovene and Delta will be equal partners within the joint venture. An agreement should be signed before the end of the year, with commissioning of the first plants expected in late 2008.
OIL & GAS GAS DISCOVERY BOOSTS CHEVRON’S LNG PLANS Chevron Corp’s Venezuela affiliate has made a significant natural gas discovery at the offshore Macuira 1X exploration well, advancing the company’s plans to evaluate Venezuela’s first liquefied natural gas (LNG) project. The Macuira 1X well encountered six gas intervals with total gross thickness of 456 feet. The well tested at a rate of 51 million standard cubic feet per day of natural gas from two of the six intervals.
MARKET PROSPECTS
Pump Industry Analyst
global demand over the period. China now consumes 13.6% of the world’s total energy. Outside China, world energy demand rose by 2.8%, the fastest percentage increase since 1996 and approximately twice the rate of the previous two years. Oil consumption in 2004 up 3.4% - showed the fastest rate of growth since 1978. Rising Chinese demand accounted for over a third of this increase. Oil output also rose, exceeding 80 million bpd for the first time in 2004. Outside OPEC, production increased by 965 000 bpd in 2004, well above the 10-year average. Russian production once again rose fastest, with output up nearly 750 000 bpd. Angola, Chad, Ecuador, Equatorial Guinea and Kazakhstan were also key growth areas. In Iraq production increased by 677 000 bpd to 2 million bpd. World nuclear consumption grew by 4.4% in 2004 with recovery in Japan accounting for half of the growth. Globally, capacity and efficiency increased and US nuclear output grew 3.2% to its highest ever level. Global hydroelectric generation rose by 5% in 2004. Growth was strong in China, up 16.6% as new capacity came online, and in Europe and Eurasia, with recovery from drought and better rainfall. The BP Statistical Review of World Energy is available at www.bp.com/statisticalreview.
PULP & PAPER ANDRITZ EQUIPS URUGUAY PULP MILL Andritz Oy will deliver the main process equipment for Oy Metsä-Botnia Ab’s pulp mill currently being built in Fray Bentos, Uruguay.
4
The 200 million order covers a fibreline – from wood handling through to pulp drying – as well as a chemicals recovery system. The mill will produce one million t/a of eucalyptus pulp and cost approximately US$1.1 billion to build. Startup is scheduled for the third quarter of 2007. The mill’s main process equipment will represent the industry’s latest technology and will therefore ensure minimal environmental emissions, cost-effective production and the very highest quality pulp. The final contracts with the equipment suppliers will be signed during the next coming months, and further details will be announced then.
NEWSPRINT PRODUCTION SHUTDOWN AT NORSKE SKOG Norske Skog is to halt newsprint production from one of the paper machines at its Norske Skog Follum mill in eastern Norway. “We are not getting adequately paid because of the excess capacity in today’s newsprint market,” explained chief executive Jan Oksum. Paper machine (PM) 2 at Norske Skog Follum will be closed down on 1 July, and plans call for the production halt to last for the rest of this year.
CHINESE PULP MILL ORDERS METSO FIBRE LINE Metso Paper will supply a 13 million fibre line to Guizhou Chitianhua Paper Industrial Co Ltd in Guizhou province, China, for a greenfield pulp mill that will use bamboo. The mill will start up in March 2007 with a designed
daily production capacity of 750 tons fully bleached pulp based on bamboo. Metso Paper’s delivery will comprise main process machinery for knotting, screening, washing, oxygen delignification and bleaching. The order also includes engineering and site services.
PETROCHEMICALS FLUOR TO DESIGN, MANAGE SAUDI PETRO COMPLEX Fluor Corp will provide front-end engineering and design and project management consultancy services for the US$3.5 billion Jubail petrochemicals complex in Saudi Arabia. The multibillion-dollar petrochemical complex will be located in Al Jubail, Saudi Arabia. Once completed, the complex will include a 1.35 million-tons-per-year ethane/ butane cracker, a 950 000tons-per-year polyethylene plant, a polypropylene plant with capacity of at least 600 000 tons per year, a 530 000-tons-per-year ethylene oxide unit to support growing global demand for these consumer product precursors, and a 300 000-tons-per-year Bisphenol-A plant including phenol and cumene units. Additional derivative facilities will be installed for methylamines, ethanolamine, ethoxylates, butane-1, and benzene extraction. Agreements with Saudi Aramco for the supply of both ethane and butane feedstock are complete, along with permitting from the Royal Commission for the commercial use of land and water. Work on the project is already under way in Fluor’s Camberley, UK office. Site work is expected to start later
this year, with project completion scheduled for 2008.
US$2BN WORLDSCALE CRACKER FOR SAUDI ARABIA Innovene, BP plc’s petrochemicals and refining subsidiary, and Delta International, a Saudi Arabiaowned independent development company, have formed a joint venture to work on a major investment in Saudi Arabia’s petrochemical sector. The companies have signed a Memorandum of Understanding which should see Innovene and Delta work on the construction of a US$2 billion world-scale cracker and associated derivative capacity in the Jubail area of Saudi Arabia. Innovene and Delta will be equal partners within the joint venture. An agreement should be signed before the end of the year, with commissioning of the first plants expected in late 2008.
OIL & GAS GAS DISCOVERY BOOSTS CHEVRON’S LNG PLANS Chevron Corp’s Venezuela affiliate has made a significant natural gas discovery at the offshore Macuira 1X exploration well, advancing the company’s plans to evaluate Venezuela’s first liquefied natural gas (LNG) project. The Macuira 1X well encountered six gas intervals with total gross thickness of 456 feet. The well tested at a rate of 51 million standard cubic feet per day of natural gas from two of the six intervals.