Gulf Petrochem Industry Moves Ahead On Exceptional Growth Wave

The Gulf petrochemical and chemical industry is geared up for expansion in 2011 and beyond. The region is set to build a vibrant, influential and highly profitable petrochemical industry.

The Gulf region has become a significant global producer of commodity petrochemicals and its global market position is all set to get bigger due to the on-going exceptional growth wave which will add significant petrochemical capacity. As a result, the overall share of the Gulf region in the world petrochemical industry is projected to grow markedly from 15 percent at present to 20 percent by 2015, which is a significant growth by international standards.

In 2010, the industry has reported a very good year, with higher demand and prices, generating excellent financial results, according to the Gulf Petrochemical and Chemical Association (GPCA) Annual Report 2010. During the year, there was also a string of announcements made that point towards the fact the region’s petrochemical industry will continue to thrive in the coming years.

In its Annual Report, GPCA outlined the continued expansion of the industry’s production base during the year 2010. The report highlighted several new large-scale projects which came on stream during the year. About 6.6 million metric tons of ethylene capacity was added in 2010 by companies in the region, with SABIC’s SAUDI KAYAN, YANSAB and SHARQ adding about 3.3 million tons, Borouge II starting up its 1.5 million ton cracker in Abu Dhabi, and Ras Laffan Olefins Company commissioning its 1.3 million ton cracker in Qatar.

As ethylene production went up, so did the ethylene derivatives. The five projects have added about 6 million tons of polyolefins to the region’s output, including polyethylenes (HDPE and LLDPE) and polypropylene.

In Kuwait, a state-of-the-art complex to produce aromatics, styrene and olefins facility started up under the name of Greater EQUATE, which is a joint venture between the Petrochemical Industries Company (PIC) and Dow Chemicals.

In Sohar, Aromatics Oman (AOL) commissioned its grassroots aromatics plant, designed to produce 818,000 tons per annum of paraxylene and 198,000 tons per annum of benzene, using naphtha supplied by Sohar Refinery.

In Saudi Arabia, the Saudi International Petrochemical Company (Sipchem) started up its 330,000 tons per annum Vinyl Acetate Monomer (VAM) plant as well as two acetyls plants to produce 345,000 tons of carbon monoxide and 450,000 tons of acetic acid. Al-Waha, a joint venture between Sahara Petrochemicals and LyondellBasell, started up its propane dehydro plant and a 450,000 tons per year polypropylene plant in Jubail Industrial City.

More recently, the Gulf region has developed new strategic priorities for the petrochemical industry in order to diversify its economy and attract wider industrial investment to create the sustainable growth necessary to meet the aspirations of the next, and future, generations. Much of this will be focused on creating and capturing the value that is currently captured by the region's export customers.

Considering this, the GPCA has decided that the theme of this year's sixth GPCA Annual Forum will be "Moving Downstream - Creating Added Value and Sustainable Growth". The region's flagship petrochemical event, the sixth edition of the GPCA Annual Forum will take place in Dubai from December 13 to 15.

The GPCA secretary-general Dr Abdulwahab Al Sadoun said, "Within the sector, opportunities exist to capture much of the added-value that is currently exported, and to create the building blocks for major downstream conversion industries offering rewarding and sustainable employment opportunities for the local youth. This, in turn, would lead to more sustainable growth through the multiplier effect of economic growth."

Dr Sadoun added, “A new era has begun for the petrochemical producers in the region - strategic imperatives are changing, feedstocks are less accessible, refinery/petrochemical integration more essential and prevalent, added value more essential, decisions more complex and markets less certain. But the region has enduring strengths that will secure its leadership role in the next decade.”

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