Mesaieed Petrochemical Holding (MPHC) has earmarked a total capital expenditure (capex) of QR1.8bn for 2023-27 as part of efforts to enhance capacity.
"Going forward, the group will continue to consider capex investments to enhance capacity, reliability, efficiency and HSE performance, with a total budgeted outlay of QR1.8bn over a period of five years from 2023 till 2027," said its board report, presented at the general assembly, which approved net profit and dividend for 2022.
Addressing the shareholders, MPHC chairman Ahmad Saif al-Sulaiti said the capex includes MPHC’s share in the new PVC (polyvinyl chloride) project funding.
MPHC has already given the go-ahead to the Qatar Vinyl Company (QVC) to construct a PVC facility with a production capacity of 350,000 metric tonnes.
On segment-wise capex, the report said the petrochemicals are expected to spend QR1.1bn on various projects, including turnarounds and dock jetty enhancement.
Other projects will include, but are not limited to, operations (HSE, plant reliability, and integrity) and maintenance shutdowns.
"These projects will improve facilities’ operational integrity, reliability and output, and reduce emissions while ensuring regulatory compliance, and will lead to improved operating cash flows via added efficiencies," it said.
In 2022, the segmental capex incurred was QR249mn. Q-Chem’s turnaround accounted for about 55% of the current year’s capex, with two additional projects accounting for most of the remaining spending.
These projects include the Q-Chem sixth furnace project and the Q-Chem dock jetty enhancement.
The sixth furnace project is currently in the commissioning phase and ensures sustainable production volumes while ensuring a more consistent consumption of allocated ethane volumes.
"The project is progressing as planned, and the furnace will be operational during the first quarter of 2023. The total cost incurred till date on the project amounted to QR89.7mn," it said.
Highlighting that the dock jetty enhancement project is a combination of restoration and enhancement, the report said it is a critical element of infrastructure currently available and would support the segment for the foreseeable future.
The chlor-alkali segment is expected to spend QR709mn on various projects.
As per the capex plan, QR543mn will be spent in relation to the new PVC plant, whose construction is expected to be completed by mid-2025.
"The project is value accretive to MPHC and the national industrial sector. MPHC will be funding the construction of the new PVC plant equivalent to its shareholding in QVC," al-Sulaiti said.
Being the first PVC plant Qatar, this project aims to position the country as a new regional player in the PVC production, while reinforcing the downstream value chain.
The new plant will be integrated with the existing QVC facilities located at Mesaieed Industrial City and will source feedstock (vinyl chloride monomer) from the existing facilities.
The new plant will maximise synergies on efficient water and power usage and existing supply chain capabilities, while assuring sustainable operations.
The new plant aims to meet the growing demand, especially the construction industry.
The PVC produced is expected to meet the domestic market demand and provide opportunities to export internationally.
PVC as a product can be handled, stored, and shipped safely and seamlessly; and could be coupled with other similar products produced in Qatar to provide opportunities for optimised logistical cost structures.
MPHC board members address shareholders at the AGM. PICTURE: Shaji Kayamkulam