Bgreen Supplement October 2014

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Inside

Petrochemicals Supplement 2014

BASF tasnee LyondellBasell oRPIc GPIc

THE BUSINESS OF SUSTAINABILITY octoBER 2014

Petrochemicals

Success Stories Industry heading towards a new era of sustainability

Brought to you by GPCA and its Responsible Care Initiative

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GULF PETROCHEMICALS & CHEMICALS ASSOCIATION


We create chemistry that makes compost love plastic.

Most plastics don’t biodegrade, but ecovio® plastics from BASF disappear completely when composted in a controlled environment. Using compostable bags for collection of organic waste makes disposal more hygienic and convenient. Rather than ending up in landfills, the waste is turned into valuable compost. When the plastic bag you use today can mean a cleaner future for the environment, it’s because at BASF, we create chemistry.

www.wecreatechemistry.com


EDITOR’S PAGE

Way to go GROUP GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA

PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5713 EDITORIAL EDITOR ASHISH SARAF ashish.saraf@cpimediagroup.com +971 4 375 5495 CONTRIBUTING EDITOR ANOOP K MENON anoop.menon@cpimediagroup.com +971 4 375 5714 ASSISTANT EDITOR SHRUTHI SARAF shruthi.saraf@cpimediagroup.com +971 4 375 5715 SUB EDITOR AELRED DOYLE ADVERTISING COMMERCIAL DIRECTOR JUDE SLANN jude.slann@cpimediagroup.com +971 4 433 2857 SENIOR SALES MANAGER JUNAID RAFIqUE junaid.rafique@cpimediagroup.com +971 4 375 5716 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 DESIGN ART DIRECTOR SIMON COBON SENIOR DESIGNER ROY CRUZ CIRCULATION AND PRODUCTION DATABASE AND CIRCULATION MANAGER RAJEESH M rajeesh.nair@cpimediagroup.com +971 4 440 9147 PRODUCTION MANAGER VIPIN V. VIJAY vipin.vijay@cpimediagroup.com

As the petrochemicals industry in the Gulf becomes more and more globalised, it cannot afford to ignore sustainability trends that are increasingly gaining ground in every aspect of the business. Worldwide, the chemical manufacturing industry contributes 5% to the total greenhouse gas emissions and represents 10% of non-renewable resource consumption (including oil, gas and coal) according to the International Energy Agency. This is reason enough for the industry to sit up and take environment sustainability seriously. But with stakeholders looking to maximise returns, does sustainability have a place in the industry? Indeed it does, according to Dr Abdulwahab Al-Sadoun, secretary general at the Gulf Petrochemicals and Chemical Association, who says the industry finds it profitable to go green. The general consensus is that petrochemical firms in the Gulf countries have taken steps to make their production process environmentally friendly. The industry is making significant achievements in response to climate change issues. While providing energy-efficient products, companies have made unprecedented strides in cutting their carbon emissions. Since 1992, the global chemical industry had reduced greenhouse gas intensity by 23% while increasing its output. For the Gulf petrochemical industry, the sustainability journey has just started and there is still a long way to go.

Contents

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+971 4 375 5713 DIGITAL DIGITAL SERVICE MANAGER TRISTAN TROY MAAGMA

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Printed on wood-free paper © Copyright 2014 CPI. All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

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Column Dubai Municipality COlumn Dr Abdulwahab Al-Sadoun

Earnest beginnings Dr Abdulwahab Al-Sadoun, Secretary-General of the Gulf Petrochemicals and Chemical Association (GPCA), takes us through the industry’s growth story

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COlumn Dr Abdulwahab Al-Sadoun

“Petrochemicals is a competitive industry, and to be ahead, companies need to enhance the efficiency of manufacturing processes, optimise supply chain and ensure that products are delivered in a very short lead time.” Dr AbDulwAhAb Al-SADoun, SecretAry-generAl of gulf PetrochemicAlS AnD chemicAl ASSociAtion (gPcA)

If you look back at the evolution of the petrochemical industry in the Gulf region, the essence of its development has been in line with the regional governments’ sustainability agenda. Sustainability is one of their key priorities, and as they wholly own most of the petrochemical companies, the strategies match. The plan in the 1970s was primarily to utilise flared gas, which caused significant pollution to the environment. There was a time when people driving to regions rich in oil fields didn’t need headlights because the flare was so intense. By developing this industry, we have thus not only managed to cut pollution levels in the environment, but added value to a depleting resource by creating significant direct and indirect job opportunities. However, the petrochemical industry cannot move towards minimising profits radically, because they have shareholders trying to maximise their return on investments, be it government or private investors. The majority of our products are commodities and nearly 85% of the output is exported. Commodities are standard products, so a polyethylene, methanol or ethylene glycol, whether manufactured in Abu Dhabi, Saudi Arabia or elsewhere, is the same material, with no difference whatsoever. But customers consider companies that have a sustainability image. The brand plays a key role, as one would rather join hands with a supplier with a good reputation. If a product is made using an environmentally friendly process or biodegradable material, customers are prepared to pay extra. The bottom line is, sustainability is very important for the industry. It enhances the image of the company and adds to brand equity, which is a must for companies with a global market. In the overseas market, customers care about how sustainably a product has been manufactured. Similarly, innovation is an ongoing process in the journey of sustainability. It’s a very competitive industry, and to be ahead companies need to enhance the efficiency of manufacturing processes, optimise supply chain and ensure that products are delivered in a very short lead time. There is always room to challenge the existing model and improve it significantly. For instance, back in 2004 the GPCA unanimously endorsed and implemented the Responsible Care initiative,

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which was adopted by the International Council of Chemical Associations (ICCA). The initiative calls for the continued improvement of EHS (Environment, Health and Safety) management. The ICCA ranks associations on the basis of their implementation of the Responsible Care Initiative, and the GPCA is on top for the second year in a row, showing the calibre of the industry in the region. The petrochemical industry in the GCC was established in the late 1970s and early 1980s, adopting the joint venture model whereby a local partner teams up with a leading global chemical company, which brings with it operational systems and expertise. The issue of environmental sustainability is high on the agenda of these companies – such as ExxonMobil, Shell and Total – all of whom have a track record of being ahead of others in terms of EHS management. From that perspective, the region is really in the vanguard. Furthermore, because they adopt international best practises, most of our member companies are RC 14001 certified, through auditing. Some of them have a Chief Sustainability Officer – a growing trend. Each industrial city has a regulatory body whose job is to ensure that all the producers comply with strict standards for emission of greenhouse gases and use of water. The oil commissions in Jubail and Yanbu have set regulations which are on a par with Californian standards. Recent studies have shown that the quality of air in these industrial cities is far better than in other major cities – regulatory bodies have done a commendable job in ensuring that environmental damage is minimised, and companies who exceed emission limits are heavily fined. It’s fair to say that the industry, despite being very capitaland energy-intensive, has been doing its best to uphold the values of sustainability. To take this discussion further, the 2nd GPCA Sustainability Conference will address issues relevant to the region that are profound, practical and pressing. Given the urgency of the sustainability agenda worldwide, we need to implement our sustainability agenda as fast as possible.


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petrochemicals success stories Saudi Arabia

saudi arabia petrochemicals industry in saudi arabia has come a long way from the humble pre-1970 days, when natural gas from the oilfields was treated as a waste product and flared off. today the country boasts of over 25 mega petrochemical complexes, which are operational, under construction or being planned. The petrochemicals sector in Saudi Arabia was estimated at about US $9bn in 2013, with an installed production capacity of about 96m metric tonnes (MT). It is the largest petrochemical producer in the GCC, accounting for over 64% of its total installed capacity. The country’s sector comprises of four key categories: Basic chemicals – such as Ethylene, Methanol, Propylene, Butadiene; Aromatics (Benzene, Toluene, Xylene); Intermediate chemicals – such as glycols and glycol ethers; Fine chemicals, and Polymers and resins. As the country accounts for more than half of the petrochemicals capacity in the GCC, any developments to reduce the production of greenhouse gases will have a positive effect on the region’s emissions portfolio. Progress to curb emissions has already been made by some companies in Saudi Arabia. In 2009, Saudi International Petrochemical Company (Sipchem) reduced nitrogen oxide emissions by 50% through a project to replace conventional burners in the reformer furnace with burners utilising the latest induced flue gas recirculation technology. The plant upgrade resulted in reducing emissions from 1,800 tonnes per year to an annual emissions amount of 500 tonnes. Similarly, global warming has become more significant in

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recent years and has led Saudi Aramco to affirm ‘stewardship of the environment’ as one of its goals, whilst assuring the supply of energy to the world. Like other petroleum and petrochemical companies, Aramco is constantly looking for cleaner alternative of energy sources that do not contribute to global warming. Companies in the Saudi Arabia are making major strides in areas such as supply-chain processes, product safety and diversity, and yet are trying to go beyond simple technical innovations or the basic environmental performance of their operations. Resource and energy-efficiency are seen as important markers and thereby are one of the main reasons for accessing competitive feedstock opportunities around the world. Thus reducing overall carbon footprint is a definite goal to achieve. The government of Saudi Arabia, as a part of its strategic plans, is promoting targeted industrial diversification to add and derive further value from its existing product lines that are currently being exported, while creating job opportunities for the large youth population. However, concerns over the diminishing gas reserves, growing competition from the US and lack of access to advanced technologies are likely to loom over the future growth prospects of the kingdom’s petrochemicals industry. Private investments are being encouraged and international petrochemical giants like Total, Dow Chemicals, Chevron Phillips, etc. are collaborating with Saudi companies to develop fully integrated mega complexes. Petrochemical projects, valued in excess of $65-70bn in total, are being planned or developed to boost the total production to 100m MT annually by 2015, and raising its share in the global market by over 12%.


petrochemicals success stories Tasnee

less emissions, more productivity Tasnee is intelligently banking on the economic returns as well as the ecological positives by carefully reducing fugitive emissions one of main objectives of tasnee’s operation and organization excellence policy is environmental sustainability. the company is committed to preserve the environment and natural resources for the future generation and this is done by complying with regulatory requirements, adopting sustainable solutions in its operations and reducing its overall environmental footprint. tasnee has shown strong commitment to these objectives by setting robust sustainable goals in the company’s scorecard with various focus areas including pollution prevention and clean technology. Tasnee has been continuously and closely managing its environmental goals by efficiently monitoring and controlling emissions and waste, while also conforming to relevant regulatory standards. Such best practices has won Tasnee the Royal Commission award for best environmental performance for three consecutive year from 2011- 13. As part of its sustainability efforts, Tasnee has undertaken the Fugitive Emissions Monitoring Program (FEM). Fugitive emissions are those that are not released through a stack, vent, duct pipes or other confined air streams. Main sources of fugitive

emissions are process equipment leaks such as through flanges, fitting, caps, plugs, open-ended lines and pump seals. Tasnee is implementing FEM across all its plants semiannually. Based on the emissions recorded, Tasnee runs additional programmes to reduce the overall emissions from its operation. The FEM program covers more than 25,000 components base and follows a fixed implementation methodology. It covers process research, flagging, detection, monitoring, repairing, re-monitoring and report generation. As per the procedure, firstly stream compositions are reviewed and various components are identified and verified. Fugitive emission leaks in process equipment Valves 85%

Flanges 5%

Pumps/Compressors 10%

Tasnee has been continuously and closely managing its environmental goals by efficiently monitoring and controlling emissions and waste 07


petrochemicals success stories Tasnee

Main sources of fugitive emissions are process equipment leaks such as through flanges, fitting, caps, plugs, open-ended lines and pump seals Next, each component is tagged with barcodes, after which leak detection and repair software are developed. Then leaking components are checked, fixed and reviewed to ensure that the problem has been resolved. In the final step, a FEM report is submitted. Dangerous gas leaks are a concern to every oil and petrochemical production plant. Not only do some of the gases harm the environment, but they also cost companies substantial financial losses. Since its inception, Tasnee has been particularly interested to control fugitive emissions to have a wider impact on the company’s operations. The combined efforts of all the FEM programmes have reduced fugitive emissions from the process equipment by over 90%, which amounts to a reduction of over 20 tonnes per year.

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AdvANTAges Of fugITIve eMIssIONs MONITOrINg PrOgrAMMe (feM) IMPACT

ACTION

Safety

Plant maintenance is upheld, which contributes towards risk reduction and incident-free operations

Health

Lesser emissions leads to a healthier occupational environment for employees and sub-contractors

Environment

The air around is less polluted and carbon footprint is lessened

Maintenance

By improving maintenance, there is huge savings in terms of both time and money

Economical

Reduced emissions save tonnes of products. This indirectly contributes to production efficiency.


petrochemicals success stories UAE

uae the uae petrochemicals industry makes up about 20% of the country’s manufacturing sector which in itself is 10% of the overall economy. local petrochemicals production meets 60% of domestic demand for plastics. the production of petrochemicals almost doubled in 2013, reaching 10mn tonnes per annum, accounting roughly 7% of total Gcc production capacity, according to Gulf petrochemicals & chemicals association (Gpca). The UAE benefits from low-cost, accessible oil and gas reserves, although its feedstock availability is lower than some of its regional peers. Feedstock is available at reduced rates under a government measure providing producers with a cost advantage for export markets. The UAE is highly reliant on ethane feedstock, accounting for 45% of the total feedstock. According to the Qatar based Economic Impact & Energy Advisory (EIEA), the next ten years will represent a key challenge to the UAE in order to reduce ethane dependency in petrochemical production and diversify its current feedstock portfolio. Some prominent companies are Ruwais Fertilizer Industries (FERTIL), which is a joint venture between ADNOC holding 66.67% and Total holding; and Abu Dhabi Polymers Company

(Borouge), which is a joint venture between ADNOC holding 60% and Borealis holding the rest. As part of sustainability initiatives, Fertil has been operating a carbon recovery plant in which 400 tonnes of carbon dioxide emissions are re-injected into the manufacturing process of ammonia fertilisers per day. According to Dr Abdul Wahab Al Sadoun, Secretary-General of GPCA, FERTIL is an ideal example of how the petrochemicals industry can create an opportunity in the face of obstacles. “The Fertil facility will be more economical in the long-term, as carbon is a crucial raw material in the production of ammonia, while it also makes a positive contribution to the fight against global warming,” he says. Other companies such as Borouge have a strong sustainability framework, which they continue to embed across all their functions. The GPCA further recommends that the region’s petrochemicals companies continue to monitor greenhouse gases and track carbon dioxide emissions as they are important factors in developing a sustainable petrochemical facility. This is in turn is expected to help chemical producers identify specific areas in which emissions can be reduced.

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petrochemicals success stories LyondellBasell

shaping what comes next LyondellBasell plants and products lead the way in petrochemical safety, environmental stewardship, innovation and sustainability as one of the world’s premier plastics, chemicals and refining companies, lyondellBasell produces materials that are essential to shaping what comes next – in electronics, food packaging, construction materials, automotive components, motor fuels, textiles, medical supplies and more. The company’s Amazing Chemistry is applied at 55 manufacturing sites located across five continents. This manufacturing network has enabled the company to be a pacesetter in the Global Fortune 500 and to earn a listing in the S&P 500.

In addition, LyondellBasell’s proprietary technologies have stood the test of time. The company recently commemorated the golden anniversary of receiving the 1953 Nobel Prize for Chemistry – that was awarded for the historic work done in a predecessor company to create our modern catalysts and polymers. While LyondellBasell is not a household name to many, since 2010 it has generated annual revenues greater than Nike, Disney and McDonald’s. In its own petrochemical sector, LyondellBasell is larger than Bayer and similar in size to Dow, based on market capitalization.

LyondellBasell supplies high-performance Polyolefins to producers of green roofing, pipe and other construction-related products 010


petrochemicals success stories LyondellBasell

While LyondellBasell is not a household name to many, since 2010 it has generated annual revenues greater than Nike, Disney and McDonald’s LyondellBasell is listed on the New York Stock Exchange as LYB. Around the globe, wherever the quality of life is improving, LyondellBasell products are likely there. These products are the structural building blocks of countless goods – numerous products which make our lives easier, safer and more enjoyable. By developing products which address global challenges such as water scarcity, energy efficiency and mobility, the company is helping to solve some of the world’s toughest problems. Many of these target the construction industry, as cooling, heating and water circulation can represent up to 80% of a building’s energy consumption. This requires the use of newer, lighter and efficient materials. And that’s where polymers play a vital role. LyondellBasell supplies high-performance Polyolefins to producers of green roofing, pipe and other construction-related products. Sales of white roofing membranes based on LyondellBasell’s Hifax TPO have grown steadily during recent years. These polymer-based membranes can reflect sunlight, creating energy savings and lowering a building’s internal temperature by up to 30°C (54°F) in hot climates. As a result, the roofing membrane has become increasingly popular with architects and builders seeking eco-efficiency. In pipe applications, customers have relied for 50 years on the company’s Hostalen high density polyethylene

(HDPE) for potable water pipe applications. Hostalen GM 5010 T3 Black (classified as PE 80) and Hostalen CRP 100 Black, as well as Hostalen CRP 100 RESIST CR Black (both classified as PE 100), are the benchmark materials used in pressure pipe for drinking water supply. They are produced using the company’s latest-generation, state-ofthe-art Hostalen Advanced Cascade Process. Demand for the resins has been increasing, particularly in Asia and Russia. With their broad range of properties, pipe systems produced using LyondellBasell’s polyolefins can help to address challenging water supply issues. The pipe systems are easy to install in rugged environments and are highly resistant to cracking, with outstanding stiffness and toughness characteristics. According to extrapolation methods described in the ISO 9080 standard, customer drinking water pipes produced using Hostalen materials have an expected service life of 100 years. Moving on Now, around the world and around the Chemisphere, LyondellBasell people, plants and products lead the way in petrochemical safety, environmental stewardship, product innovation and sustainable performance. To learn more about how LyondellBasell is shaping what comes next, visit www.lyondellbasell.com.

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petrochemicals success stories BASF

pioneers and innovators As a global player, BASF’s reach and strength in the petrochemical industry is unmatched BasF is one of the world’s leading manufacturers of petrochemicals. the company’s petrochemicals division has amassed a huge amount of production and application expertise and supplies its customers with competitive and intelligent solutions. thanks to its global presence, BasF’s petrochemicals division is represented in both the established markets in europe and North america and the key growth regions in asia pacific and south america. BASF Petrochemicals is the heart of the company’s unique Verbund and the cornerstone of the petrochemicals value chain. The division produces and sells an extensive range of high-quality basic chemicals and products tailored to the specific needs of customers. There are five product areas as part of the Petrochemicals division. CraCker produCts Cracker products are building blocks of the chemical industry and the starting materials for several industry processes. They are utilised in end products that help to meet demand for clothing, food, housing and mobility, including medication and personal care items. BASF produces a range of cracker products, from ethylene and propylene to butadiene, butene and benzene.

pVC and plastiCizers BASF Plasticizers lend flexibility to PVC (Polyvinyl chloride) products such as cables or films, protecting them against the effects of weathering and temperature and helping to maintain the product’s functionality. PVC is highly versatile and can be used in a range of applications such as construction, packaging, and production of household articles. Polymer PVC is often combined with ‘performance enhancing chemicals’ such as plasticizers, colorants, light stabilizers, and lubricants. It is produced from essentially 100 % fossil fuels, and can be recycled. alCohols and solVents BASF is a leading manufacturer of oxygenated solvents and alcohols, which contribute to processes within the automotive and construction industries, as well as in the production of pharmaceuticals or modern chip and electronics components. Within BASF, these solvents are key ingredients in producing plasticizers, acetates or acrylates. They are also used in the production of detergents, cleaners or brake fluids, and for cosmetics, electronic coatings and paints. industrial Gases Industrial gases are volatile substances and must be handled carefully. Safety and quality is a priority while producing

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petrochemicals success stories BASF

BASF is a leading manufacturer of oxygenated solvents and alcohols, which contribute to processes within the automotive and construction industries such gases at plants. Such gases are used in scientific research, food and beverage industry, construction, rubber and plastic manufacturing and many others. For all welding, freezing, powering, heating and industrial cleansing need, BASF produces the gases at their Ludwigshafen site. alkylene oxides and GlyCols BASF produces alkylene oxides, which are highly reactive chemical compounds, under carefully controlled conditions in quality plants. Due to their high reactivity, they can be further processed into a wide variety of downstream products that are used in numerous industries. Alkylene oxides and glycols are an integral component of several daily products such as PET bottles, functional clothing, detergents and furniture. BASF is one of the few companies that are completely integrated in the ethylene oxide (EO) and propylene oxide (PO) value chain. The company produces ethylene and propylene – the starting materials for EO and PO – as well as all of the important direct derivates. BASF Petrochemicals is present in all regions with production sites – close to their customers. The division supplies an extensive range of high-quality basic chemicals and industrial petrochemicals. Petrochemicals are used in manufacturing numerous products including antifreezes, coatings, superabsorbent polymers, and cling films. Recently, BASF’s Petrochemicals division introduced a new butadiene extraction plant at its Verbund site in Antwerp, Belgium. This plant has an annual production capacity of 155,000 metric tons, and is the second of its kind in Europe. BASF operates a similar plant in Ludwigshafen, Germany, with an annual production capacity of 105,000 metric tons.

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In the Gulf region, BASF is a member of the GPCA (Gulf Petrochemicals and Chemicals Association), a leading industry platform to share knowledge and ideas on the developments and trends within the chemicals industry. BASF will be present at the GPCA Sustainability Conference, to be held from October 21-23 in Sofitel Downtown, Dubai. Globally, BASF is a leader in quantifying the downstream benefits of a sustainability initiative. It conducts eco-efficiency analyses that sum up the ecological impacts of a product or process across its entire life cycle, allowing BASF customers and end-consumers to weigh costs and impacts for themselves. Most impressively, BASF regularly compiles details of its carbon footprint and recently used them to show that the savings in greenhouse gas emissions from customers using BASF products outweigh by a ratio of 3 to 1 the emissions caused during production and disposal. eColoGy and eConomy BASF plastics bring economic and environmental issues into balance. The company’s biodegradable plastics Ecoflex and Ecovio, for example, are used to make packaging that can be disposed of as organic waste and converted into compost in just a few weeks. In automotive production, plastics are easy to process and have high thermal and mechanical stability, save weight and therefore fuel and emissions. BASF insulating foams such as Styropor and its newer version Neopor, or the ultraefficient polyurethane foam Elastopor, make a huge contribution to climate protection in buildings. They ensure a pleasant indoor climate while drastically lowering energy consumption and CO2 emissions. Further information on BASF is available at www.basf.com.


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Soprema Middle East FZE P.O.Box 371013, Tel: +971 4 609 1661 Fax: +971 4 609 1662, info@soprema.ae


petrochemicals success stories Kuwait

Kuwait the petrochemical sector is becoming a significant source of non-oil income in Kuwait, and is expected to contribute more than 50% to the country’s non-oil earnings. petrochemical projects worth us $7,565m are expected to be executed in the country between 2011 and 2017. anticipating increased demand, Kuwait has planned to expand its petrochemical capacity from 3.4 mtpa in 2012 to 7.9 mtpa by 2015 at a compound annual growth rate of 32%. The industry plans to increase its petrochemical income to make up more than 50% of the country’s non-oil income. The Petrochemicals Industries Company (PIC), which is a subsidiary of Kuwait Petroleum Corporation, is expanding its aromatics sector and the Olefins III projects as part of its development strategy. The Olefins – III plant at the Shauiba Complex is worth $7,000m and is expected to be operational from 2015. However, Kuwaiti petrochemicals needs to develop the production chain and ensure that the industry is buffered from the effects of increased competition in

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external markets, according to a report by Business Monitor. The PIC is amongst the environmentally conscious organizations and is said to have spent US $752,275 on environmental initiatives in the last year. During the same time, the company replaced low-pressure membranes of its hydrogen recovery units to reduce flaring and produce more ammonia. PIC has also been working towards recovering more CO2 from the inter-stage separator of the compressor to produce more urea. Another major player is Equate which is said to have signed Kuwait’s first ever carbon emission reduction and capture deal with Greencarbon in 2008. The project aims to reduce the company’s carbon dioxide emissions to the atmosphere by piping the gas to the neighbouring Greencarbon processing facility. Equate has also established the Middle East’s first plant water recycle project with a cost of over US $11m. It can recycle 245m gallons of water annually and the project has the objective to recover and reuse 80% of the company’s process water.


petrochemicals success stories PIC

supporting Kuwait’s growth This year, Petrochemical Industries Company has posted an impressive result of its sustainability initiatives a study carried out during 2009–10 showed that the petrochemical sector accounted for 4.5% of non-oil GDp in Kuwait. as per the Kuwait petroleum corporation’s strategic vision, the petrochemical sector is expected to play a crucial role in attracting foreign investments into the country, developing the private sector and maximising the share of the non-oil sector on Kuwait’s GDp. as its subsidiary, petrochemical industries company (pic) is committed to diversifying into new markets to grow the business as well as the Kuwaiti economy. With an outstanding safety record and collaborations with some of the most important sustainability projects in Kuwait’s history, PIC has a long history of working eco-efficiently. The PIC formed a permanent committee way back in 2002 to optimise and control energy consumption. The

committee has yearly objectives based on an energy management strategy and its members meet every month. Owing to the committee’s initiatives PIC has achieved a 10% reduction in direct energy intensity since 2002. In 2013, the company intensified its efforts with the launch of the 2017 PIC Sustainability Goals, the publication of its first Sustainability Report and the signing of the United Nations Global Compact (UNGC). Through the 2017 PIC Sustainability Goals, the company wants to lead the way in advancing all three dimensions of sustainability: economic growth, sound environmental performance and good corporate citizenship. PIC aspires to be a recognised global petrochemical player leveraging Kuwait’s national resources in value-added partnerships to drive growth while creating value for stakeholders. The

Petrochemical Industries Company is committed to diversifying into new markets to grow the business as well as the Kuwaiti economy 017


petrochemicals success stories PIC

The PIC formed an energy management committee, way back in 2002 to optimize and control energy consumption. PIC’s emissions to atmosphere by weight 1800

Tonnes CO2 - eq/MT

1600 1400

2012-13

1200

2013-14

1000 800 600 400 200 0

SO

NO

CO

Ammonia

Urea

company published its first sustainability report in July 2013 for the fiscal year 2012–13. The report is said to represent a milestone in its sustainability journey and serves as a public commitment to the stakeholders ensuring them of the company’s commitment to the development of a sustainable operating model that incorporates economic, social and environmental elements into the decision-making processes. The company has managed to reduce its total energy intensity by 5% in 2013-14 when compared to 2012-13. Based on the findings of a detailed audit of energy consumption, PIC installed new flow meters to cover a broader boundary. As a result, the company is able to monitor its energy consumption more comprehensively.

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Reducing water intensity and conserving the resources are a key component of the 2017 PIC Sustainability Goals. Due to the lack of fresh water resources in the country, the company sources water directly from the municipality. PIC’s water usage intensity in 2013-14 decreased by 23%, predominantly through initiatives to improve its operational efficiencies. The company has also been able to reduce its greenhouse gas emissions by 19%. However, the company also announced that an additional reason for the significant improvement in environmental performance in 2013-14 when compared to 2012-13 was due to a turnaround in April 2012, resulting in higher-than-normal energy, water and GHG intensities for the month, which led to higher intensities for 2012-13. However, according to a graph shared by the company in its sustainability report, this year there was significantly higher SOx emissions compared to 2012. PIC’s key hIghlIghts of 2013-2014 • Continued to increase its operating efficiency and reduce costs through implementation of Six Sigma projects. The impact during this operating year is estimated at US $31m. • Obtained the Golden Performance Award for safety, health and environmental performance for the second consecutive year. • Initiated reuse of process water to irrigate on-site vegetation. • Obtained ISO 50001: Energy management System certification for its plants, head office and Bubyan Club.


PeTroChemICAlS SUCCeSS STorIeS Bahrain

Bahrain The petrochemical industry ranks high on the priority list of industrial development in Bahrain and has enjoyed support from the government and the private sector in Bahrain. As a result, the Gulf Petrochemical Industries Company (GPIC) was set up in 1980 at a cost of US $159m, and with the objectives of producing ammonia and methanol. GPIC commenced production in 1985 at a daily capacity of 1,000 metric tonnes of each product. In 1987, the output capacity was expanded to 1,200 and the very next year a third expansion brought the capacity to a total 1,700 tonnes. This contributed to creating a new downstream industry in Bahrain.

GPIC has commissioned one of the world’s largest and the Middle East’s first carbon capture system at its Sitra petrochemical complex. The unit can capture 450 metric tonnes of CO2 per day. The company has also joined the United Nations Global Compact (UNGC), and has won the International Fertilizer Industry Association’s Sustainability and Protection Certification. Another project that uses petroleum products as feedstock is the coke calciner, run by Aluminium Bahrain. It was built at a cost of US $400m and has an annual capacity of 450,000 metric tonne. That project also includes a water treatment plant.

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PeTroChemICAlS SUCCeSS STorIeS GPIC

At the heart of GPIC There is huge competitive advantage when environmental considerations are weaved into the business strategy, the company believes Gulf Petrochemical Industries Company (GPIC) was established in the Kingdom of Bahrain in December 1979 as a joint venture between GCC member states for the manufacture of fertilisers and petrochemicals. The joint venture is equally owned by the Government of the Kingdom of Bahrain, Saudi Basic Industries Corporation and Petrochemical Industries Company, Kuwait. GPIC uses natural gas (which is readily available in Bahrain) as a feedstock for the production of ammonia, urea and methanol, totalling 1.5m tonnes each year. In addition to the production plants, the GPIC Complex, which has been built in Sitra on a reclaimed area of 60ha, comprises of a utilities plant, maintenance workshops, offices, stores and laboratories. Sustainability is at the heart of the GPIC success story. Since inception, GPIC believes cutting edge competitive advantage can only result from weaving social and

environmental considerations into business strategy. This ethos has become the basis of the company’s sustainability and Corporate Social Responsibility (CSR) strategy. Together with its shareholders, the organisation has long worked to build stronger, safer, healthier and more active communities, and advance environmental conservation. For over three decades, GPIC has been committed to environmental care and the wellbeing of its people and communities. The company has always sought new ways of combatting global climate change, which has led to the evolution of GPIC’s scope from a relatively narrow focus to a much broader approach integrating economic, social, environment and governance requirements within the sustainable development framework. In a step further towards the company’s more global approach to sustainability, GPIC has become a beacon of women’s empowerment, a catalyst for business growth, a pioneer in the development of human talent and has upheld environmental

The company has always sought new ways of combatting global climate change, which has led to the broadening of GPIC’s scope 020


PeTroChemICAlS SUCCeSS STorIeS GPIC

GPIC has also attained IFA (International Fertilizer Industry Association) Protect & Sustain - Product Stewardship excellence certification sustainability. The company has further consolidated its vision and commitment to all of these principles through its membership at the UN Global Compact. The success motivates the company further to meet future challenges. It inspires and reinforces GPIC’s commitment to manage its business processes to produce an overall impact on society. The company also believes that the only way forward towards corporate sustainability is through cooperation and innovation. “GPIC’s focus on sustainability is embedded in everything we do - our strategy, operations and daily actions. Environmental, social and economic responsibility are key ingredients of our business ethics. Our commitment to sustainability and the UN Global Compact are now more important and relevant than ever,” says Dr Abdulrahman Jawahery, GPIC President. “We are constantly aware that our business can only be as healthy and resilient as the communities we live and operate in.” The company believes in the concept of ‘leading by example’ and considers itself as a role model in the realm of environmental protection. It uses practical demonstration projects to verify environmental credentials. The fish farm, the bird sanctuary, palm tree plantations, herbal and aromatic plants garden and the olive tree oasis have been established within GPIC’s facilities to demonstrate the company’s commitment. Moreover, the challenges of regional and global climate change have always been taken seriously at GPIC, and in order to manage greenhouse gas emissions, it commissioned the Middle East’s first carbon dioxide recovery plant in 2010. The unit captures 450 metric tonnes of CO2 per day from the methanol plant reformer flue gases, recycles them to produce more methanol and urea, thereby significantly reducing its carbon footprint.

GPIC also has a robust and internationally recognised Safety, Health and Environmental Management System. Some of its accolades include the prestigious Sir George Earle Trophy from RoSPA, UK in 2005 and the R.W. Campbell award from the National Safety Council, USA in 2008 for excellence in HSE management systems. ISO 9001, ISO 14001, OHSAS 18001 - which have been integrated into PAS 99 - and ISO 27001 that deals with information security, are the company’s accreditations. GPIC has also voluntarily embraced Process Safety Management (PSM) at its facilities, while other accreditations also include Responsible care RC14001, Risk Management ISO31000, ISO22301 for Societal security and Business Continuity Management system, and ISO 17025 (General Requirements for the Competence of Testing and Calibration Laboratories). GPIC has also attained IFA (International Fertilizer Industry Association) Protect & Sustain - Product Stewardship excellence certification. The company has joined the United Nations Global Compact (UNGC), the world’s leading corporate citizenship initiative, and is committed to implementing its ten principles. GPIC further shares its sustainability performance globally by issuing sustainability reports on GRI (Global Reporting Initiative) guidelines. Lastly, the company is a significant contributor to the national economy of Bahrain. Having been established with a paid up capital of US $159m, GPIC’s cumulative profits have exceeded a billion dollars. The company’s activities, represented by natural gas purchases, employment and training of Bahraini nationals, utilisation of local contractors, power consumption and other financial and commercial operations inject around US $100m annually into the national economy.

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01 Dr Abdulrahman Jawahery, GPIC President

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petrochemicals success stories Qatar

Qatar Qatar continues to be the second largest chemicals producer in the region. over the past five years, capacity expansion in Qatar has increased the country’s share in the Gcc from 12.3% in 2008 to 15.3% in 2012. During the same period, Qatar expanded its chemicals capacity faster than any other Gcc state, growing at a rate of 18.4% per annum. Every year, the country releases a report titled ‘Sustainability in the Qatar Energy and Industry Sector’ that details the initiatives taken by various companies, including petrochemical, to lessen the impact of their businesses on the environment. According to the report, the petrochemical and chemical production achieved the highest growth rate in 2013. A range of multi-billion dollar oil, gas, helium, refining and petrochemical projects are currently underway which will further expand the sector’s output in the years ahead. The sector was the largest consumer of water with 68.4% of total consumption by the sector and it also recorded a 156%

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increase in water consumption as a result of two new production processes starting up. Water intensity too has increased due to the major impact of one of the petrochemical companies that doubled its water use from its generation plant. However, on the brighter side, a single petrochemical company that represents more than 56% of the sector’s total production volume has increased its recycling output by 86% from 2012 levels, while increasing production by 9.7%, the sustainability report stated. But, petrochemical companies remain the highest emitter of nitrogen oxides per tonne of production. Opportunities also exist for further improvement in energy efficiency within operations. For example, since QAPCO’s newest LDPE plant began operations, energy efficiency has improved significantly. In 2013, energy intensity for QAPCO polyethylene production improved by 26% as a result of new technologies within the plant. Further operational improvements are expected for QAPCO over the next four years as major plans to retrofit boilers and cracking furnaces are carried out.


Image for representational purposes only

petrochemicals success stories QAFCO

experienced yet modernised Achieving efficient and sustainable operations is top priority for Qatar Fertilizers Company Qatar Fertilizers company (QaFco) is the country’s first large-scale venture in the petrochemical sector. its inception in 1969 was a first step in Qatar’s industrial diversification program to utilise its natural gas resources. the company’s shares are owned by Yara Netherlands (25%) while industries Qatar (iQ) (a majority-owned subsidiary of Qatar petrochemicals) owns the rest. Qatar commits to enforcing international standards for environmental protection when designing and implementing its industrial projects. QAFCO has a well-established Environmental Management System (EMS) and is ISO 14000-certified, which helps the company set up processes and practices to identify, evaluate and reduce ecological impact and at the same time increase operating efficiency. The EMS is also designed to address regulatory demands in a systematic manner, reducing the risk of non-

compliance and non-regulated issues, such as pollution prevention, odour management, and water and energy conservation. According to QAFCO, being in operations for a long time presents particular challenges while complying with environmental laws and regulations. Some of the company’s facilities are 40 years old, when environmental best practices were not yet conceived. Therefore a part of QAFCO’s successful environmental legal compliance in 2013 included continuing efforts to retrofit and upgrade such facilities, the company said in its Sustainability Report. As part of its water conservation efforts, QAFCO has initiated a project under which plant discharges are treated and disposed in order to attain the goal of zero process wastewater discharge to the sea. The plan is to reuse the treated water after further processing, for steam production

The Environmental Management System helps to set up processes and practices to identify, evaluate and reduce ecological impact 023


petrochemicals success stories QAFCO

Sahara project aims at protecting and enhancing Qatar biodiversity through conservation of maritime and terrestrial species at Al-besheriya Island the urea production, minimises reconstruction and reduces the company’s CO2 emissions. However, QAFCO exceeded its NOx limits in primary reformer Ammonia-3 plant since the DeNOx system stopped functioning due to corrosion in downstream coil. Additional issues were detected at HRSG G1.8 in the power station. It is suspected that the HRSG DeNOx system underperformed due to chocking at the upstream and downstream of the flue gas recycle blower. Efforts are also underway to improve compliance by implementing environment-related projects. Selective Non Catalytic Reduction (SNCR) DeNOx system has been installed at the company’s primary reformer flue gas duct in Ammonia-3 plant and to reduce the NOx emission, low NOx burners with Flue Gas Recirculation (FCR) technique have also been applied. Further, QAFCO also adopts external sustainability projects. For instance, its Sahara project aims at protecting and enhancing Qatar biodiversity through conservation of maritime and terrestrial species at Al-Besheriya Island and at creating jobs through profitable production of food, water, clean electricity and biomass in desert areas.

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or for other uses in the plant. By incorporating and modifying operating procedures during plant startup and rundown activities, QAFCO is said to have already significantly reduced discharge to sea. QAFCO has also opted for gas turbine-based, CoGen 1 and 2 (CHP) plants with a capacity of 140MW and producing 600t of steam per hour. The CHP plants are designed to meet the thermal and electrical base loads of a facility, leading to an increase in operational efficiency and a decrease in energy costs. At the same time, CHP reduces the emission of greenhouse gases. In 2013, with its latest expansions fully operational, QAFCO maximised the use of process CO2 for urea production. When synthesizing ammonia and urea from natural gas, ammonia is always formed in excess and there is a shortage of CO2. The excess hydrogen is used as fuel for the steam reformer, excess of ammonia is sent for urea production and the CO2 produced by the reforming process and the CO2 recovered from the flue gas reformer or boiler are then fed together to the urea synthesis section. It maximises

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petrochemicals success stories Oman

oman according to the Gpca, the commodity petrochemicals capacity in oman has been 3.5m tonnes per annum for few years now. methanol and aromatics are the main commodity chemicals produced in oman and they have been key drivers behind capacity expansion in the country over the past years. however, between 2008 and 2012, oman’s petrochemicals capacity grew from 1.4m to 3.5m tonnes, a growth of 25.6% per annum. Oman India Fertiliser Company SAOC (OMIFCO), Oman Methanol Company LLC (OMC), Salalah Methanol Company LLC (SMC) and Oman Oil Refineries and Petroleum Industries Company (ORPIC) are some of the leading companies in the country and they are already actively upholding environmental causes. Orpic launched its first Annual Sustainability Report in

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2013. It used the Global Reporting Initiative (GRI G3) index approach to present its economic, environmental and social initiatives. Extending its Environmental Improvement Plan is said to have been key to the growth of Orpic’s projects and to promote economic development. OMIFCO has installed eight fixed environmental stations to monitor and control the emissions resulting from the operations, helping the company meet national and international standards. There are also three fixed environmental stations in the plant that monitor the ambient air quality at the fence of the site. All these stations measure oxides of nitrogen, carbon monoxide, ammonia, and particulate matter. Besides monitoring air emissions, OMIFCO also monitors the quality of seawater as well as groundwater.


petrochemicals success stories Orpic

exceeding environmental goals With strong business growth and valuable sustainability practices, ORPIC is staying ahead of the game oman oil refineries and petroleum industries company (orpic) is oman’s national refining and petrochemicals company, which was established by the ministry of Finance, Government of the sultanate of oman and by oman oil company in 2011. the company’s integrated business is comprised of four plants: mina al Fahal refinery (maF) in muscat, sohar refinery (sr), polypropylene plant (pp) and aromatics plant (ap) in the sohar industrial port area. liSt of orPic PlantS Plant

caPacity

Mina Al Fahal Refinery

106,000 bpd

1982

Sohar Refinery

116,000 bpd

2006

Polypropylene Plant

350,000 MT of polypropylene (p.a.)

2006

Aromatics Plant

818,000 MT of paraxylene (p.a.) 198,000 MT of benzene (p.a.)

2010

Bpd barrels per day/MT metric tonnes

StartEd in

Orpic’s refineries receive crude oil from Petroleum Development Oman (PDO), the country’s primary exploration and production company, and process it to create a series of premium quality fuels that support 100% of the country’s fuel demands. The management’s vision is to build a leading and integrated Omani refining and petrochemical business. EnvironmEntal PErformancE In 2011, Orpic developed an Environmental Improvement Plan (EIP) in agreement with the country’s Ministry of Environment and Climate Affairs to improve the environmental performance of its operations in Sohar. It covers five key focus areas including wastewater treatment and odour control, flare and Sox emission reduction, Leak Detection and Repair (LDAR) and industrial waste management. The total investment in Orpic’s EIP projects amounts to US $47m, of which US $13m (2012), and US $34.9m (2013) have already been invested, with an Environment Department budget of US $20m for 2014. The EIP’s main achievement has been a 60% reduction in flaring and 80% reduction in SOX emissions from Sohar Refinery compared to 2011. The implementation of the LDAR

More than 32,000 tons RFCC spent catalyst and 10,000 tons oily sludge has been exported for re-use as per Basel convention 027


petrochemicals success stories Orpic

Orpic has developed an Environmental Improvement Plan in agreement with the country’s Ministry of Environment and Climate Affairs programme at the refinery has also resulted in the saving of 210,000 kg/year of VOC. Polypropylene and Aromatics Plant have been continuing their LDAR campaigns in 2014. Also, a total of 12 e-noses have been installed in strategic locations for odour monitoring. There has been a significant reduction in odour complaints from nearby community, while an odour complaint validation procedure has also been established. Orpic has constructed a 10,000 m2 on-site hazardous and non-hazardous temporary waste storage facility, while the operations of its Waste Water Treatment Plant has undergone significant structural improvements. Lastly, more than 32,000 tons RFCC spent catalyst and 10,000 tons oily sludge has been exported for re-use as per Basel convention. corPoratE Social rESPonSibility Beyond Orpic’s core refining and petrochemical business, the company believes that it has a responsibility to make a positive impact in the society and contribute to Oman’s In-Country Value. With this goal in mind, the company

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strives to play an important leadership role by building long-lasting partnerships that support the communities’ development. Orpic achieves its strategy of community engagement in various ways. The company engages with suppliers and SMEs to showcase the opportunities available at Orpic to all local and national businesses. The company also continues to create new jobs, as well as supports training programmes which lead to employment in the local businesses. Further, Orpic’s Training Centre Services provides an excellent internship programme to college and university students in Oman. Orpic has been undertaking Corporate Social Responsibility (CSR) initiatives through Jusoor, donations and sponsorship programmes. The company has donated medical supplies to 15 local schools and planted 800 trees at 12 schools in the community as part of an employee volunteering campaign. Also, its Ehsan Volunteering team, won at Jusoor’s Volunteerism Programme, in a competition between teams from Orpic, Vale and Sohar Aluminium.



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