GPCA Forum to focus on changing chemical landscape

On November 17-19, His Excellency Eng. Suhail Mohamed Faraj Al Mazrouei, Minister of Energy for the United Arab Emirates, will deliver the inaugural address at the Annual GPCA Forum taking place in Dubai, UAE. As leader from an influential OPEC country, His Excellency Al Mazrouei will no doubt share unique insights regarding the on-going energy and economic developments of the petrochemicals industry.

The 10th anniversary edition of the Forum, the flagship event of the Gulf Petrochemicals and Chemicals Association (GPCA), will be held under the theme “Building on Achievements: Enabling Continued Success in the Change Chemical Landscape”. CEO’s and senior executives from the world’s leading chemical and petrochemicals companies will share insights on the Forum theme. His Excellency Abdullatif A. Al-Othman, Governor & Chairman of the Board of Directors, Saudi Arabian General Investment Authority (SAGIA) will deliver this year’s opening address. Other notable industry leaders who have confirmed participation include Rashed Saud Al Shamsi, Chairman GPCA and Petrochemicals Director, ADNOC; Yousef Al-Benyan, Vice Chairman, GPCA and Acting Vice-Chairman and Chief Executive Officer, SABIC; Nizar. M. Al-Adsani, Deputy Chairman & Chief Executive Officer, Kuwait Petroleum Corporation and Neil Chapman, President, ExxonMobil Chemical.

Previous inaugural speakers at the GPCA Annual Forums have included Saudi Minster of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi, His Royal Highness Prince Abdulaziz bin Salman Bin Abdulaziz, Saudi Arabia’s Deputy Minister of Petroleum and Mineral Resources; His Excellency Dr. Mohammed Saleh Abdulla Al- Sada, Minister of Energy and Industry of Qatar; Her Excellency Sheikha Lubna bint Khalid Al Qasimi, UAE Minister of International Cooperation and Development; and Dr. Rashid Bin Fahad, UAE Minster of Environment & Water.

Diversified industries
According to Dr. Abdulwahab Al- Sadoun, the United Arab Emirates has grown into a nation with an open business mindset as a part of its identity, which is evident in the government’s drive to diversify its revenue streams to include industries, products and services that create high value. “To host the UAE Minister of Energy at the 10th Annual GPCA Forum is therefore a demonstration of the leadership’s continued focus to support the development of a dynamic hydrocarbon downstream sector. In addition, the petrochemicals industry remains one that is poised to bring in greater returns, create jobs and help in building a knowledge economy. Collaborative discussions between multiple stakeholders, like those at the Annual Forum, will be crucial in charting the way forward, so that the downstream sector can fulfill its growth potential, now and in the future, ” Dr. Al- Sadoun added.

His Excellency Dr. Mohammed Saleh Al Sada earlier stated that three developments would influence the region’s petrochemicals industry. “As oil prices reach their lowest levels in 4 years, downstream economists have to re-evaluate their strategies. The impact of US shale gas on the competitiveness of our region’s industry is putting downward pressure on gas prices in the region and the emergence of coal based polyethylene in China shows that the country is looking at alternative feedstock to develop their downstream sector,” he said. A coherent strategy to overcome competition from different markets including mixed feedstock crackers, upgrading existing facilities, regional integration and multiplying the number of industry participants has been recommended.

Promising future
Over the past decade, the Annual GPCA Forum has not only become a key feature in the global chemical industry agenda, but also a crucial knowledge sharing and networking platform for the region’s and global industry members and stakeholders. In 2014, the event broke all attendance records, attracting over 2,000 attendees from 42 countries.  

Against the backdrop of a proposed comprehensive Free Trade Agreement between the GCC and the top 10 trading partners, including the European Union, the GCC sees many opportunities ahead. Just a removal of tariffs and reduction of non-tariff barriers would result in estimated $ 64.4 billion addition to GDP of Arabian Gulf economies, out of which $5 billion could arise from chemical exports alone.

The GCC petrochemical industry has consistently exported around 80% of its products in the last 5 years, counting the EU has a major market after Asia. According to Dr. Al-Sadoun, a comprehensive Free Trade Agreement with this key trading partner, which would include the removal of customs tariff and associated Non-Tariff Barriers, will reduce operational costs for chemical exporters from the Arabian Gulf, increasing returns up to $2.1 billion for producers.”

According to the GCC Petrochemicals & Chemicals Facts and Figures 2013, the petrochemicals capacity of the GCC reached 140.5 million tonnes in 2013, an 8.7% increase from 2012. The sector is also profitable: revenues figures from the region hit $89.4 billion in the same year, a 7.3% growth from the previous period.

Petrochemical production capacity in the Arabian Gulf has grown nearly four-fold since 2000, producing 147.2 million tonnes of products in 2014. As mega-projects for plastics and fertilisers come on-stream, capacity is expected to hit 198.6 million tons by the end of this decade, forecasts GPCA.

Thorough and effective trade reforms between the EU and the GCC will result in closer ties between two regions. If the agreement is to be reached, it will bring about positive results for the GCC petrochemicals industry: the EU consumers will have access to competitively priced products from the Arabian Gulf, while the GCC producers will earn higher returns.

The EU and GCC are significant trade partners, with exports from the regions accounting for 5% and 11% of trade respectively, according to data from the European Commission. Both sides have been negotiating a comprehensive free trade agreement since 1988. Informal contracts between the two sides have been made since then; however, a successful conclusion to the negotiation has yet to be made.