GCC petrochemical industry records significant growth in 2011 - GPCA

In its 2011 Annual Report, the Gulf Petrochemicals & Chemicals Association (GPCA) emphasized the strength of the GCC petrochemical sector in the global market. According to the report, regional petrochemicals production capacity grew 13.5% last year to nearly 116 million tons, up from 102 million tons in 2010, on the back of further expansion of manufacturing facilities.

Saudi Arabia alone accounted for more than half of the $100 billion in sales generated by the GCC petrochemicals sector, with Saudi Arabian Basic Industries Corporation posting total revenues in 2011 of $50.64 billion and a net profit of $7.8 billion.

The GPCA annual report provides a comprehensive overview of the major sector developments in each of the Gulf states.  The report also describes 2011 as a year of consolidation after the demand slump caused by the 2008 economic downturn, with the industry recording sales and revenue growth and notable progress in the development of new projects.

“Continued investment and a cluster of significant new agreements demonstrate the leading role the GCC petrochemicals sector is now playing worldwide,” said Dr. Abdulwahab Al-Sadoun, Secretary General of the GPCA. “The GPCA is pleased to announce this market growth and to recognize the contribution of every industry player across the region.”  He added: “We are optimistic about 2012, despite the gloomy economic forecast in European and overseas markets, due to the continued focus on technology, innovation and long-term partnerships.”

The most significant deals signed in 2011 include Saudi Aramco and Dow Chemical Company’s joint venture – Sadara Chemical Company signed in October 2011, a large scale project which will include 26 manufacturing units for performance product output, including polyurethanes among others.  There was a surge in deals for additional new downstream facilities in Saudi, ensuring 2012 and beyond will be the most dynamic the country’s downstream sector will have ever seen.

In December 2011, Qatar Petroleum joined forces with Shell to build a petrochemicals plant at the cost of $6.8 billion. 

Borouge is another joint venture, between Abu Dhabi’s National Oil Company (ADNOC) and Borealis of Austria. Borouge awarded several contracts throughout 2011 to expand its petrochemical complex Borouge 3.  In January 2011 the company awarded an $111 million contract to Alpine Bau Deutshland AG to construct a series of non-process buildings for the expansion of the complex as well as awarded $169 million to Hyundai to build a polyethylene (XLPE) unit as part of Borouge 3.

In early 2011, Kuwait Petroleum Corporation (KPC) and SABIC signed an agreements and a memorandum of understanding respectively with China Petroleum and Chemical Corporation Limited (Sinopec), seeing two of the region’s biggest players become integral in China’s burgeoning petrochemical sector, helping to meet growing global demand.