Market heavyweight Industries Qatar (IQ) – the holding entity of Qatar Petrochemicals, Qatar Fertiliser and Qatar Steel – has planned capital expenditure (capex) of QR11bn for 2023-27.
A "significant" portion of this spending will be related to the new blue ammonia train, amounting to QR4.4bn, and IQ’s share of capex in the new PVC (polyvinyl chloride) project, amounting to QR121mn.
Valued at approximately $1.06bn being fully internally funded, the new train will have a designed capacity of up to 1.2mn tonnes per annum (MTPA) of Blue ammonia, making it the world’s largest facility," HE the Minister of State for Energy Affairs and IQ Chairman and Managing Director Saad bin Sherida al-Kaabi said in the board of directors report presented during the general assembly.
“There is no doubt that this project further add on our expertise in commissioning, operating, and maintaining ammonia plants,” he told shareholders at the meeting, which approved all the items on the agenda.
The group will continue to focus on its capex programmes with critical importance to improve asset integrity, operational efficiency, reliability, cost optimisation, capacity de-bottlenecking, and regulatory compliance, according to Abdulla Yaaqob al-Hay, acting manager Privatised Companies Affairs Department, QatarEnergy.
In terms of capex over the next five years, Qatar Fertiliser is expected to incur QR9.2bn in various projects, including a new ammonia train. As per the capex plan, QR4.4bn will be spent in relation to the new ammonia train. In addition, other expenditures will include maintenance related shutdowns.
The EPC (engineering, procurement and construction) contract for the new Ammonia-7 train was awarded to a consortium of ThyssenKrupp and Consolidated Contractors Company. The new train is intended to be operational by the first quarter of 2026.
The fertiliser segment spent QR729mn in capex in 2022. This includes initial capex relating to the new blue ammonia train (QR35mn).
About Qatar Petrochemicals, it said in terms of capex over the next five years, the segment is slated to spend QR1.3bn on various projects. As per the capex plan, QR440mn will be spent in relation to the new PVC project in form of capex.
As per the Principles Agreement, the total capex outlay relating to the new PVC plant will be shared between IQ and Mesaieed Petrochemical Company in a ratio of 44.8% and 55.2%, respectively; equivalent to their share in Qatar Vinyl Company based on a new joint venture agreement.
The segment had seen capex of QR371mn in 2022, primarily related to maintenance-related expenditures, routine fixed asset additions, and HSE improvements. This also includes IQ’s share of QR7mn towards capex on the new PVC project.
Qatar Steel is expected to incur QR0.5bn in capex in 2023-27 in various projects including asset replacements, HSE and reliability improvements.
The segment incurred a capex of QR62mn in 2022, primarily related to routine property, plant and equipment additions.