The growth of chemicals industry in the Middle East is set to beat other key industries, including oil and gas, transportation, defense, banking and automotive, says IHS – the leading global source of critical information and insight.
China will be the biggest market for these Middle East exports, which will grow by more than eight per cent year-on-year in 2016, representing an increase of more than six per cent growth above 2013 chemical export figures.
“The Middle East continues to be a dominant force in petrochemical production,” said Dave Witte, general manager of IHS Chemical and senior vice-president at IHS. “The region faces an opportunity to pivot to strategies that leverage their growing technological expertise, expand their global footprint and seize upon commercial advantages. Additionally, it enables Middle East producers to continue building on their leading position in commodity production and expand into intermediates and higher-value products.”
Sometimes, healthy competition is good. For the Middle East refining and petrochemical industry, a changing global feedstock mix and increasing competition in the United States driven by the availability of cheaper gas feedstock, is reinforcing previous decisions by Middle East petrochemical producers to continue investing in new technology. The industry is also diversifying its feedback mix and expanding its product slates to include higher-value intermediates.
“This is a positive transition that many maturing industries face, as technology, competition and market dynamics mandate change,” Witte said. “We are witnessing the beginning of the “second generation” of the Middle East chemical industry. During the IHS Forum in Dubai, we will examine the challenges and opportunities facing the Middle East chemical industry, and discuss the investment outlook. Investments are likely to differ significantly from the recent past, but will help move the industry in a new direction.”
One such example of this Middle East diversification strategy, which will also expand job creation in Saudi Arabia, is Sadara, a $20-billion joint venture between Saudi Aramco and Dow Chemical, which will incorporate liquid feedstocks as well as gas to feed its cracker at Al Jubail.
Sadara’s complex, scheduled to be online in 2015, will include more than 20 process units making amines, glycol ethers, isocyanates, polyether polyols, polyethylene, polyolefin elastomers, and propylene glycol. SABIC and ExxonMobil Chemical, meanwhile, are investing $3.4 billion to build a rubber and elastomers complex that will introduce ethylene propylene diene monomer rubber, polybutadiene rubber, and carbon black production to Saudi Arabia.