Qatar Petroleum (QP) has announced plans to merge Qatar Vinyl Company (QVC), part of Mesaieed Petrochemical, into Qatar Petrochemical Company (Qapco), which is part of Industries Qatar. The activities of both companies will be integrated through a service agreement arrangement. Both Mesaieed Petrochemical and Industries Qatar are subsidiaries of QP.

The move will not change the shareholders’ ownership but QP said the creation of a single company to operate the assets on behalf of both firms will allow synergies to be realized. Its president and CEO, Saad Sherida Al-Kaabi, said the aim is to enhance the companies’ competitiveness, financial performance and resilience. He commented: “The shareholders of Industries Qatar and Mesaieed Petrochemicals will directly benefit from this integration as it reduces the operating cost and enhances the profitability of both companies.”

The process is expected to start this month and be completed before the end of 2017. Upon completion, Qapco will be a single expanded company fully managing both its and QVC’s current activities. The company has plants at Mesaieed producing 840,000 t/y ethylene and 780,000 t/y low density polyethylene, as well as a 70,000 t/y sulfur unit. QVC produces 370,000 t/y caustic soda, 180,000 ethylene dichloride and 355,000 t/y vinyl chlorine monomer.

The integration follows a similar move announced in December 2016, when QP said it would merge the activities of subsidiaries RasGas and Qatargas into one company, Qatargas. That process was expected to be completed within 12 months.

In June 2016, QP announced it would cede control parts of the industrial city of Mesaieed in 2017 as the state-owned organization restructures to focus on its core markets at a time of sustained low oil prices and increased competition.

Control of 200 projects at the site was due to transfer on Jan. 1, 2017 to Manateq, a state-owned company that manages Qatar’s special economic zones. The handover included the light industries areas (east and west), storage areas for gabbro (igneous rock) and raw materials, the “concrete zone” and the medium industries area, the latter hosting detergents, sulfur, fertilizers, organic materials and acids products.