Gas shortage likely to almost halve petrochem growth in GCC over next decade

25-Nov-14

Annual growth in the petrochemicals sector in the 6 nation Gulf Cooperation Council (GCC) is likely to slow down to 7% over the next 10 years, against an average of 13% seen over 2003-2013, Abdulwahab Al Sadoun, secretary general of the Gulf Petrochemical and Chemicals Association, said, as reported by Platts. The reason for the slowdown was the growing regional shortage of natural gas. The GCC consists of Saudi Arabia, Kuwait, the UAE, Qatar, Oman and Bahrain, of which the first four are OPEC members and all but Bahrain are significant oil and gas producers and major manufacturers of petrochemicals. Even Bahrain is seeking to develop its petrochemicals industry in conjunction with a downstream petroleum sector that mainly processes Saudi crude. Most of the major petrochemical producers in the GCC use natural gas as a key feedstock. Sadoun forecast that most of the region's future petrochemical development in at least the medium term would be concentrated in Qatar and Abu Dhabi in the UAE. Qatar is the only GCC country still well supplied with gas due to its giant offshore North Field, the world's largest conventional non-associated gas reserves that straddle Qatar and Iran. The Abu Dhabi government years ago allocated long-term gas supplies for major planned petrochemical developments, ensuring their viability. Even in Qatar, petrochemical development is likely to be constrained by future gas supply because the emirate currently has a moratorium in place on further North Field upstream development.