Speculation is rife in Kuwait about what effect the financial crisis could have on KDow Petrochemicals (KDP), the planned joint venture between Dow Chemical (Midland, Michigan / USA; www.dow.com) and Petrochemical Industries Company of Kuwait (PIC, Sabahiya; www.pic.com.kw) – see Plasteurope.com of 21.07.2008 and 17.12.2007.

Dow’s share price has tanked since the plans were announced, due to the global slowdown in demand. This will have repercussions for the terms of the deal, says the newspaper “Kuwait Times”. The paper notes that Kuwait’s Supreme Petroleum Council has yet to approve the USD 11 bn transaction. It quotes sources as saying that “up to 30%” of the terms, which foresee Dow selling its Middle East partner a 50% stake in five of its existing global petrochemical businesses valued at USD 19 bn in exchange for a USD 9.5 bn cash payment, may be renegotiated.

Thus far, neither Dow nor PIC has commented on the speculation. Original plans called for the plans to be finalised by the end of 2008. The jv planned to manufacture and market a number of plastics, including PE, PP and polycarbonate, is to have its world headquarters in the southeastern part of the US state of Michigan, where it would receive state and local “financial incentives.”