Burgeoning petrochemical industry in Middle East seeks alternative feedstock

Polyethylene capacities in the Gulf will more than double from 10.7 mln tons in 2009 to 21.5 mln tons by the year 2015, polypropylene capacities will augment from 4.8 mln tons in 2009 to 9.5 mln tons by 2015, according to Dr. Abdulwahab Al-Sadoun, Secretary General of GPCA. As a result, the Middle East will increase its share of global PE capacity from 13% in 2008 to 19% in 2015, making it the leading global player. Share in PP will rise from 9% in 2008 to 13% in 2015, placing it behind Asia/Pacific, which will have a 23% share, China with 17%, and Western Europe with 14%. The Middle East will just overtake North America in PE and the two regions will be on par for PP capacities. The six members of the Gulf Cooperation Council, which include Saudi Arabia, the U.A.E. and Iran are set to produce 153.2 mln tpa of petrochemicals by 2015 compared with 105.7 mln tons last year. The region’s share of the global market will rise to 20% from 16% last year, while that of USA and Europe will decline from about 25% and 23%, respectively. This massive capacity expansion drive is also leading to a more diversified product portfolio. For the first time in this region, engineering plastics, acrylics and synthetic rubber will be produced. The annual growth rate of the industry topped 30%. However, a shortage of gas is leading to petrochemical producers in the Gulf seeking alternative feedstocks like liquefied petroleum gas, condensates. Currently, petrochem makers in the region rely heavily on ethane feedstock, resulting in the ethylene value chain being the most developed in the Gulf petrochemical industry. 71% of ethylene is produced from cracking ethane in the region, though only 30% on a global level is produced from cracking ethane.
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