Petrochemicals forecast remains bright amid ongoing challenges
Yousef A. Al Benyan, acting vice-president and CEO of Sabic, at the event. - Supplied photo
Dubai - Despite the associated challenges with the recent oil price volatility, the forecast for the petrochemicals remains positive, due to attractive investment environments, government commitment and future demand, said speakers at the 10th Annual Forum, organised by the Gulf Petrochemicals and Chemicals Association, or GPCA.
Published: Thu 19 Nov 2015, 11:00 PM
Last updated: Fri 20 Nov 2015, 10:46 AM
"Forty years ago, we were in a very different place. Though the region was already one of the leading oil producers in the world, the industry had no method of capturing the associated gas by-product that would eventually be used in the basic chemicals we produce today," said Eng Abdullatif Ahmad Al Othman, governor and chairman the Board of Directors, Sagia.
"In Saudi Arabia, we created the master gas system to capture, treat, and process the gas through a very large and sophisticated gas network system of more than 4000 kilometers in length, with production capacity of 9 billion standard cubic feet every day. This transformed our industry and economy to include petrochemicals, resulting in a revolution over the past four decades." According to GPCA estimates, the GCC petrochemicals industry manufactures 136.2 million tonnes of products as of 2014, earning $87.4 billion in revenues. "Today, we contribute 13 per cent of the world's petrochemical output by volume," he said. Al Othman outlined Saudi Arabia's ambitious development strategy, which includes goals to double employment, investment and economic growth in the next 10 years. The downstream sector is expected to play a major role in this vision, with the potential to create 200,000 direct jobs in this period and investment potential of more than $150 billion, according to SAGIA estimates.
"Saudi Arabia is expected to be home to over 50 billion people in the next decade. We have the raw materials, an emerging logistics and transport hub and some of the most progressive investment laws in the world," said Al Othman. "We have a strong business case for investors as we have the right market, right economy and right investment climate."
From a global perspective, the GCC's petrochemicals industry is also developing a reputation. "The concept of a global petrochemicals market was born here in the Middle East more than 40 years ago," said Neil Chapman, President, ExxonMobil Chemical. "Today, the Middle East accounts for 80 per cent of the world's interregional chemical exports."