The Persian Gulf Cooperation Council's petrochemical industry saw a 3.7% increase in output last year and is well positioned to become the ""centre of gravity"" in the mid-term, according to Sheikha Lubna bint Khalid Al Qasimi, UAE's Minister of Foreign Trade. She said that due to cost efficiency, the region is set to supply 40% of incremental Asian demand for polyolefin and produce a significant supply of ethylene for the emerging markets. Although global economy shrunk by 4.6%, the Persian Gulf's expansion continued with production surging 3.7% last year, she said. ""Production went up across the Middle East last year with Saudi Arabia posting an increase of 6.3%, UAE (Abu Dhabi) 4.4%, Kuwait 4.2% and Qatar 7.4%,"" she told the GPCA Forum. ""Even with tough economic environment where capital infusion has increasingly been challenging, the ability of PGCC producers to fund their expansion projects has not been an issue.
By the end of this year, the Persian Gulf will have more than 4m ethylene capacity and by 2015, the region will see nine new crackers and downstream plants come on stream - five in Saudi, two in Iran and one each in UAE and Qatar. In Saudi, 7m of ethylene capacity will be added through 2014, accounting for 25% of global ethylene global growth. In Abu Dhabi, Borouge has commissioned the world's largest cracker, which aims to triple the company's annual production capacity to over 4.5 mln tons within the next four years. The global ethylene share of the Persian Gulf petrochemical producers is expected to reach 16% by end of this year and reach 20% by 2014, a long way from the 5% market share at the beginning of the previous decade. Domestic and international demand is slated to grow, especially with global petrochem supply migrating away from the traditional production centres in Europe and North America towards low cost region such as the Persian Gulf region. "Industry analysts suggest that this downturn could see further migration of the industry to the Middle East and Asia making the Persian Gulf region the future centre of gravity for the global petrochemical and chemical industry. The emerging markets led by China are key outlets for petrochem production for the Persian Gulf region, which is expected to supply up to 40% incremental Asian demand for polyolefin in the medium term.