New mega projects are nearing completion and scheduled to come onstream in the GCC will pose the threat of fresh competition for established overseas companies and impact petrochemical majors. After collapsed demand witnessed during the economic crisis of 2008-09, the petrochemical industry has started to see a revival in demand. A positive outlook for the petrochemicals industry is forecast as prices start to rise, and improved demand from China is helping to buoy commodity market sentiment.
MEED reports this week that Petro-Rabigh, a joint venture of Saudi Aramco and Japan’s Sumitomo Chemical Company, has approached construction contractors over a US$5 bln-plus expansion of its existing Rabigh petrochemicals complex. Abu Dhabi National Chemicals Company (Chemaweyaat) and another Aramco joint venture with Dow Chemicals, are also moving towards building two of the world’s biggest US$10 bln plus petrochemicals complexes in their home territories.
Millions of tons of new petrochemicals capacity will come online during the next five years at a time when global economic growth is likely to remain slow over the next two. These new capacities in the Gulf region, with access to cheap and abundant feedstock will force more established, but expensively-run plants abroad out of business.