Kuwait is a country blessed with abundant Oil resources. The Government of Kuwait has given thrust to sectors such as Petrochemicals, which can make use of the cheap feedstock available. Petrochemicals sector has been developed as part of the export diversification strategy of the Kuwait government. Kuwait has made persistent efforts to improve and enhance its Petrochemicals sector at par with the regional players in GCC. Kuwait Government is implementing a “Strategy 2002-2020” for the development of Petrochemicals sector in the country. In this report, we have analyzed the opportunities for the Kuwait Petrochemical sector in the form of upcoming Joint ventures, increasing synergies for Petrochemical and refining integration and the cost advantage enjoyed by the Kuwait Petrochemical companies. The report also covers the government policies and initiatives which impact the functioning of the Petrochemicals sector in the country. The report discusses in detail the challenges faced in the form of volatility in prices of feedstock and increasing competition within the Petrochemical players in the GCC region. The report analyzes the opportunities available for the sector, which is mainly driven by the increasing demand from the Asian countries for Petrochemicals and products like paints, plastics and Polymers. http://www.e-marmore.com/offerstores/kuwait-petrochemicals/66/1/2706/

1. Markaz Sector Report 2014
Kuwait Petrochemicals
Waning low cost advantage
Research Highlights
Analysis of Kuwait’s petrochemical sector highlighting growth drivers, trends, investments, challenges and future outlook for the industry

2. MARKAZ SECTOR RESEARCH
Kuwait Petrochemicals – August 2014
Kuwait Financial Centre K.P.S.C. “Markaz” 2
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3. MARKAZ SECTOR RESEARCH
Kuwait Petrochemicals – August 2014
Kuwait Financial Centre K.P.S.C. “Markaz” 3
Table of Contents
1. Executive Summary ......................................................................................... 6
2. Sector Overview .............................................................................................. 9
Refining and Petrochemical Integration ................................................................... 13
Diversification into allied sectors ............................................................................. 14
3. Sector Analysis .............................................................................................. 15
Number of companies, production in terms of volume, value..................................... 15
Market Share estimation ........................................................................................ 19
4. Major Players ................................................................................................. 21
Government companies ......................................................................................... 21
Strategic Business Units (SBUs) of PIC .................................................................... 22
Joint Ventures ....................................................................................................... 24
Private Players ...................................................................................................... 27
Figure 4.5: Overview of Kuwait Petrochemicals Sector .............................................. 27
5. Key Trends ..................................................................................................... 28
Use of Technology from foreign countries ................................................................ 28
Integration of refining and petrochemical for mitigation of risk .................................. 28
Shift towards heavier feed stock ............................................................................. 30
Increasing Investments in Kuwait ........................................................................... 31
6. Price Trends ................................................................................................... 33
Prices of feed stock ............................................................................................... 33
Prices of Petrochemicals......................................................................................... 33
7. Growth Drivers .............................................................................................. 34
Recovery from the Global crisis ............................................................................... 34
Increased demand from Asian Markets .................................................................... 34

4. MARKAZ SECTOR RESEARCH
Kuwait Petrochemicals – August 2014
Kuwait Financial Centre K.P.S.C. “Markaz” 4
Cost Advantage ..................................................................................................... 36
Government Initiatives ........................................................................................... 36
Emergence of Joint Ventures in Kuwait ................................................................... 36
Increased markets for the by-products .................................................................... 37
8. Challenges ..................................................................................................... 44
Competition from Saudi Arabia and Qatar ................................................................ 44
Anti-Dumping charges ........................................................................................... 46
Reducing Availability of gas feed stock .................................................................... 47
Development of Shale Gas Technologies ................................................................. 49
Implementation problems in Integration of Refining and petrochemicals .................... 50
Volatility in Prices .................................................................................................. 51
Lack of Clear Strategy of the Kuwait Government ..................................................... 52
Reduced imports in China ...................................................................................... 53
9. Regulatory Aspect ......................................................................................... 55
Environmental Regulations ..................................................................................... 55
Regulations in Kuwait ............................................................................................ 55
10. SWOT Analysis ............................................................................................... 59
11. Appendix ........................................................................................................ 60
GLOSARRY............................................................................................................ 64

5. MARKAZ SECTOR RESEARCH
Kuwait Petrochemicals – August 2014
Kuwait Financial Centre K.P.S.C. “Markaz” 5
Tables Charts
3.1
Revenues of Petrochemical Sector (in bn USD) - Region Wise
2.1
Oil Reserves (in bbls), 2013
6.1
Price in US Dollars/Million Tons
2.2
Oil Fields in Kuwait
7.1
Paints Demand growth (in %)
2.3
Oil Production in Kuwait (in thousand barrels per day)
8.1
GCC Petrochemicals & Chemicals capacity (MTPA)
2.4
Oil Exports from Kuwait (in bn USD)
8.2
Impact of Anti-Dumping charges on imports in India
2.5
Non-oil exports by value (in USD bn), 2012
8.3
Ease of Doing Business Index in the year 2012
2.6
Contribution of various sectors to Kuwait’s GDP, 2012
11.1
Kuwait's Trade and investment
3.1
Capacity of Basic Petrochemical production (in mn tons)
11.2
GCC Chemical and Petrochemical exports in 2012
3.2
Compounded Annual Growth Rate (Capacity addition in Mn tons) from 2008-2012*
11.3
Price Estimates of Brent Crude (in USD/barrel)
3.3
Average Capacity Utilization of petrochemicals sector from 2008-2012
11.4
Petrochemical Sales (in USD mn)
3.4
Capacity Utilization of petrochemicals sector from 2010-2012
11.5
Average Capacity of Chemicals and Petrochemical production in GCC(2008-2012)
3.5
Kuwait's production capacity of petrochemical products (in mn tons) in 2010
11.6
Capacity Addition of petrochemicals in GCC(MTPA)
3.6
Nationals in Chemical Industry 2012 (in %)
11.7
Equiploymers-Financials
3.7
Export Share by value in 2012(in %) in GCC
11.8
Qurain Income Statement (Annual Standardized in Millions of U.S. Dollars)
3.8
Exports CAGR from GCC (2009-2015)
11.9
Petrochemical Projects in Kuwait
4.1
PIC’s Investments in various companies
11.10
Naphtha price tends
4.2
Shareholding in China Integrated Project Charts (contd.)
4.3
Profit margin of Equipolymers
7.7
Greater China Light Vehicle Sales (2005-2012 in Millions of Units)
4.4
Net Income of Qarain Petrochemical Industries Corporation (in USD mn)
8.1
Total Investments as a percentage of GDP in GCC
4.5
Overview of Kuwait Petrochemicals Sector
8.2
Petrochemicals Projects Status in Kuwait, 2014
5.1
GCC Petrochemicals & Chemicals capacity (Million Tons per Annum - MTPA)
8.3
Revenue share from petrochemicals in 2012 among GCC Countries
5.2
Petrochemical Exports (in USD bn) from GCC in 2012
8.4
Estimated reduction in Gas feed stock availability in GCC
5.3
Total Investments in Kuwait as percentage of GDP
8.5
Top Shale Gas Reserve holders in the World (in Trillion cubic meters)
7.1
GDP Growth in China and India (in USD bn)
8.6
Price trends of Brent Crude (in USD / barrel)
7.2
Chemicals and Petrochemicals Import by India (in USD bn)
8.7
2012 Petrochemical exports from Kuwait by value (%) – region wise
7.3
Demand for Chemicals and Petrochemicals in China by value (in USD bn)
11.1
Naphtha price tends
7.4
Fertilizers Production Capacity of GCC countries in 2012 (in million tons)
7.5
GCC Chemicals Sales Revenue by Segment, 2012 (in %)
7.6
GCC Polymer Exports by Country in 2007 and 2012 (in %)

6. MARKAZ SECTOR RESEARCH
Kuwait Petrochemicals – August 2014
Kuwait Financial Centre K.P.S.C. “Markaz” 6
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