BMI's Executive Summary

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Industry Overview

The Canadian petrochemicals industry is the third largest in the country's manufacturing sector. Most of Canada's petrochemicals industry is concentrated in Alberta, Ontario and Quebec. Alberta accounts for more than 50% of industry output; this can be attributed to the availability of relatively cheap feedstock and the presence of major companies who have set up their plants in the province. Alberta authorities have passed the Incremental Ethane Extraction Policy (IEEP) to bolster ethane production in the province. This move has led to a flurry of activity in the sector, with major companies announcing new projects to benefit from the incentives being offered. Most of the petrochemicals firms operating in the country are global or regional majors. Major players operating in the country are Canada-based Nova Chemicals and Petro-Canada, the US-based Dow Chemical and Imperial Oil and the Netherlands-based Shell Chemicals.

Industry Developments

Nova Chemicals and natural gas processor Aux Sable Canada agreed to construct an extraction facility in Fort Saskatchewan. Local Keyera Facilities Income announced the expansion of its Rimbey natural gas processing plant. Aux Sable and local BA Energy are constructing the Heartland Off Gas Plant (HOP) at Scotford. Local company Keltic Petrochemicals is constructing a US$4.5bn petrochemicals and liquefied natural gas (LNG) project on Canada's Atlantic coast, for which it has received environment approval.

Business Environment

According to a survey conducted by KPMG in 2006 that studies the business costs in 11 countries (in North America, Europe and Asia Pacific), Canada's business and labour costs scored the lowest in the survey. Production costs including the electricity cost and business telephone and wireless charges are also low in Canada. Canada's electricity cost is 22% lower than in the US (based on annual electricity costs for the average manufacturer).

Industry Forecast

According to the Canadian Chemical Producers Association (CCPA), chemicals shipments in the country increased 10% year-on-year (y-o-y) in 2006 due to fairly strong domestic demand for basic chemicals. Sales volumes rose 6% y-o-y, while prices increased 4% y-o-y. Export sales rose 6% y-o-y to CAD18bn (US$18.06bn) in 2006. According to the National Energy Board, about 7,900m3 per day of ethane-ethylene could be recovered from the oilsands developments by 2012. Polyethylene (PE) production is forecast to reach 3.65mn tonnes per annum (tpa) in 2007, while polystyrene (PS) production is likely to increase to 222,000tpa in 2007 from the estimated 203,000tpa in 2005.

Contents

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Chapter 1 - Executive Summary

Industry Overview

Industry Developments

Future Outlook

Chapter 2 - SWOT Analysis

Central Asia Petrochemicals Industry SWOT

Chapter 3 - Market Overview

Table: Central Asia Petrochemicals Industry – Cracker Capacity Data & Forecasts (’000tpa)

Chapter 4 - Industry Trends and Developments

Chapter 5 - Industry Forecast Scenario

Table: Central Asia Petrochemicals Industry – Historical Data & Forecasts

Chapter 6 - Economic Outlook

Table: Kazakhstan Macroeconomic Data & Forecasts

Table: Uzbekistan Macroeconomic Data & Forecasts

Chapter 7 - Company Monitor

Company Profiles

Uzbekneftegaz

Aktau Plastics Plant (Akpo)

ChevronTexaco

Chapter 8 - BMI Forecast Modelling

How we generate our Industry Forecasts

Chemicals & Petrochemicals Industry

Cross checks