2013-03-03 10:47:23 - New Energy market report from Business Monitor International: "Algeria Petrochemicals Report Q2 2013"

The Q213 Algeria petrochemicals report examines how delays to petrochemicals projects are affecting the petrochemicals business environment and the prospect of downstream diversification. It also assesses the impact of new government legislation on investment, particularly the upstream sectors, which are crucial to securing competitive feedstock for the petrochemicals industry. In this report we also look at Algeria's search for new petrochemicals markets and warn that the country faces tough competition from strong Middle Eastern and new Asian industries, as it looks to emerging markets and developing economies to generate business.


Full Report Details at
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Algeria has focused on low added-value production, relying on commodity chemicals that are highly price responsive to market fluctuations and easily undermined by capacity elsewhere

in the world. The industry is some distance from competing on equal terms with European petrochemicals producers in terms of product diversification. As such, it will be vulnerable to market fluctuations in the narrow range of products it produces, although the effects on margins should be cushioned by the local availability of competitively priced feedstock.

Overall, the petrochemicals market will undergo a period of massive change over the next decade as unconventional shale and gas reserves are produced, which will alter the dynamics at play within the market. Given the vast reserves thought to be available in Algeria, the impact of these hydrocarbons resources cannot be underestimated.

However, delays to current projects indicate that the realisation of the country's full potential in petrochemicals is unlikely over the forecast period. These delays will not only raise costs and lead to a narrowing of margins in the long term, they will also create a more opaque business environment that will undermine progress and put the industry's significant cost advantages - in terms of domestic natural gas feedstock availability - at risk.

Over the last quarter BMI has revised the following forecasts/views:

* The main development in H113 is the planned commencement of operations at Sorfert Algeria's fertiliser plant, which will produce around 800,000 tonnes per annum (tpa) of merchant ammonia and 1.2mn tpa of urea for export. Mechanical works were completed at the beginning of 2013, but production was stalled due to delays in government
* The Algerian government set out a US$80bn five-year investment budget in 2012, a US$12bn increase on previous plans as a result of investment in the country's unconventional gas reserves. This will have an inevitable knock-on effect on the petrochemicals industry, not only because there will be more gas available for feedstock, but also because Sonatrach will have more money to invest in revamping and boosting its petrochemicals industries.
* The Algerian Council of Ministers has recently approved a new national hydrocarbons law, boosting the Algerian oil sector's appeal. The passing of the new law has been key to attracting the foreign investment and technical expertise needed to discover and tap the country's highly attractive shale and unconventional gas reserves.
* Algeria ranks 10th in BMI's Middle East and Africa Petrochemicals Risk/Reward Ratings (RRRs) matrix, with an overall score of 40.6 points, down 0.5 points compared to the previous quarter due to a 1.5 point decline in its risks score.

Partial Table of Contents:

BMI Industry View
SWOT
- Political
- Economic
- Business Environment
Industry Forecast
- Table: Arzew Complex Capacities, 2014 ('000 tonnes)
- Table: Algeria's Petrochemicals Sector, 2010-2017 ('000tpa, unless otherwise stated)
Macroeconomic Forecasts
- Macroeconomic Analysis
- Private Consumption Outlook
- Fixed Investment Outlook
- Government Consumption Outlook
- Net Exports Outlook
- Table: Algeria - Economic Activity
Industry Risk Reward Ratings
- Regional Petrochemicals Risk/Reward Ratings
- Africa Coming Into View As Gulf States Mature
- Arab Spring Takes Its Toll
- Regulatory Framework Dictates Risks
- Table: MEA Petrochemicals Regional Risk Reward Ratings
- Industry Risk Reward Ratings
Market Overview
- Table: Algeria Cracker Capacity, 2009-2016 ('000 tpa)
Industry Trends And Developments
- Upstream
- Table: Table: Petrochemicals Capacity At The Planned Arzew Complex
- Olefins & Polyolefins
- Methanol
- Fertiliser
- Regulation
Company Profile
- Sonatrach
Regional Overview
- Table: Africa's Gas Reserves, 2012 (bcm)
- Table: Africa's Oil Reserves, 2012 (bn bbl)
- Egypt And Algeria Lead The Way
Global Petrochemicals Overview - Q213
- Global Petrochemicals Overview
- Change In Feedstock, But Not In Market Cycle
- Polymers Heading On Different Trajectories
- Table: BMI's Oil Price Forecasts, Average Price (US$/bbl)
- Table: BMI's Refined Products Forecasts
- Refiners: Is The Party Over?
- Jet Fuel: Middle East & Africa Remain Positive As Global Air Traffic Slumps
- Table: Total Air Freight & Passenger Volumes
- Gasoline And Diesel: Demand Destruction Takes A Toll
- Naphtha: Asia Stays Afloat While Europe Sinks
- Bunker Fuels: Trans-Pacific Route Rebound Amid High Prices
Demographic Forecast
- Demographic Data
- Table: Algeria's Population By Age Group, 1990-2020 ('000)
- Table: Algeria's Population By Age Group, 1990-2020 (% of total)
- Table: Algeria's Key Population Ratios, 1990-2020
- Table: Algeria's Rural And Urban Population, 1990-2020
Glossary
- Table: Glossary of Petrochemicals Terms
Methodology
- Chemicals And Petrochemicals Industry
- Cross Checks
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Full Table of Contents is available at:
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