Petrochemical industry in GCC estimated to rise by over 40% by end of 2015

22-Aug-12

The GCC petrochemical capacity is estimated to increase from 77.3 mln tpa to 113 mln tpa at the end of 2015, as per the Gulf Petrochemical & Chemicals Association (GPCA), with both long and short term opportunities. Petrochemicals production capacity in the region grew 13.5% last year to nearly 116 bln tons, with Saudi Arabia alone generating more than half of the US$100 billion in sales registered. US$12 bln of projects are under execution in Saudi Arabia, and another US$41 biln in future projects. Furthermore, petrochemical projects worth US$19 bln are under execution in the GCC providing opportunities in both the long and short terms. The petrochemical industry in the GCC has been vulnerable to financial crisis, as it has consistently seen up and down cycles in recent years. It has been revealed that these cycles follow the refining industry cycles with a six to 12-month lag. However with recent advances in the petrochemical industry, the cyclic effect may not be the case anymore. Abdulmohsen Al Majnouni, chairman SAS-AIChE, the Saudi Arabian section AIChe, said “the major short-term opportunities are in more integrated specialty and performance chemicals. These are basically secondary and tertiary industries. This is especially true for the Middle East countries as the supply of cheap feedstock is questionable.” In the long term, the opportunities will be found in the compounding industries, detergent basics, pharmaceuticals, rubbers and tires. Previously, companies operating in the GCC have enjoyed subsidized feedstock and less competition in the petrochemical area, however, now, competition and the availability of feedstock are two factors that demonstrate promise and excitement. Now, not only has the feedstock become scarce and limited, but the entrance of many international companies in the business has made it very competitive. Companies have become smarter, energy efficient, cost effective and more sustainable,” Al Majnouni said.