Middle East petrochemicals sector investment reaches new heights

Petrochemicals production in the Gulf is expected to leap by almost 50% by 2015, at which point the region will be supplying a fifth of the world's petrochemicals output. According to a recent report by the Gulf Petrochemicals and Chemicals Association (GPCA), the annual petrochemicals production of the six Gulf states is expected to soar around 46% to 155 mln tpa by 2015, up from 105 mln. Today the GCCnations produce around 16% of the world's petrochemicals output; that figure will rise to 20% by 2015. Saudi Arabia is the region's largest producer of petrochemicals, with a 50% share of the total output, while Kuwait produces around 9% and Oman and Qatar 5% each. The UAE and Bahrain export 3% and 1% respectively, of the region's total petrochemicals output. Nor are the major Gulf players resting on their laurels. Mindful of the need to preserve their long-term income streams, Gulf governments have pledged to invest record sums in maintaining and improving the region's petrochemicals capacity. By spending big on facilities including those at Jubail Industrial City and Ruwais, Saudi plans to raise its total petrochemicals output to 70 mln tons by 2015, from the current production level of 53.2 mln. Meanwhile state-run Kuwait Petroleum Corp (KPC) has said it will invest approximately US$90 bln over the next five years in its oil and gas businesses and growth strategy. In the UAE, which expects to more than double its current output to 7.8 mln tons by 2015, Abu Dhabi is leading the way In 2010 the Abu Dhabi government confirmed the awarding of contracts for the development of a 'Chemical City', which will cost a reported US$20 bln. The project is under the auspices of the Abu Dhabi National Chemicals Company, or ChemaWEyaat, which was created by presidential decree in 2008 and is jointly owned by the International Petroleum Investment Company, Abu Dhabi Investment Council and Abu Dhabi National Oil Company (ADNOC). Analysts are also keeping a keen eye on Qatar's investment plans. More than US$70 bln has been invested into the development of Ras Laffan industrial city, which will double its current size to accommodate hydrocarbons demand for the next 30 years, while the government is also committed to investments worth more than US$125 bln in the next five years, on construction and hydrocarbon-related projects.
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