The Middle East’s position in the global petrochemical industry continues to increase. By 2017, the Middle East (including Algeria, Egypt, and Iran) will add 21.175 million tons/year of ethylene capacity. The current capacity of ethylene in the region is 27.25 million tons/year. However, some new projects planned by Iran may be delayed or cancelled due to the impact of international sanctions. At the same time, the annual output of synthetic resin in the Gulf Cooperation Council (GCC) region will increase from the current 18 million tons to 25 million tons in 2016, an increase of 39%.
The Saudi Sabah Financial Group stated that Saudi Arabia’s approximately US$50 billion petrochemical projects have already been formulated or are being implemented. These projects aim to cultivate Saudi domestic industries rather than just satisfying the export of basic chemicals.
Of these projects in Saudi Arabia, the second-phase expansion projects of the Rabigh Refining and Chemicals Joint Venture, each holding 37.5% of the shares of Sumitomo Chemical and Saudi Aramco, were not announced until the end of May this year. The project, with a total investment of 7 billion U.S. dollars, will expand the existing 1.3 million tonne/year ethane cracking unit at the Rabigh refinery and build a new aromatics complex, which is expected to start production in 2016. The main products of the second-phase expansion project include ethylene propylene rubber, thermoplastic polyolefin, methyl methacrylate, polymethyl methacrylate, low density polyethylene, ethylene-vinyl acetate copolymer, paraxylene/pure benzene, and Propylbenzene and phenol/acetone.
The Sadara chemical joint venture project with an investment of US$20 billion is the largest project currently underway in the Middle East. In 2011, Dow Chemical and Saudi Aramco established a Sadar joint venture. The project will be built in Jubail Industrial City, where the cracker will be the first Saudi cracker designed to use a mixture of ethane and naphtha.
The Sardar project is expected to achieve an annual sales income of 10 billion U.S. dollars after a few years of production. The Dow Chemical Company stated that the biggest difference between the Sardar project and petrochemical projects 10 or 15 years ago is its complexity and scale effect. The Sadar project, which includes 26 production facilities, is huge and will become the world's largest integrated chemical production plant. In addition, the Sadar project will also help Saudi Arabia become the center of downstream products.
Keith Savard, the Sabah Finance Group’s economic researcher, said in a report in April this year that the two joint ventures of Sadar and Rabigh have encouraged downstream industries to establish industrial parks near their factories. For investors, close to the raw material manufacturers can reduce the allocation. For the government, nurturing domestic industries has created more job opportunities.
A 300,000-ton/year low-density polyethylene plant in Jubail, Saudi Arabia, was built this year. Saudi Basic Industries owns 35% of Saudi Kayan Petrochemical, Al-Kayan Petrochemical holds 20% of the equity, and the other 45% is held by public shareholders.
The person in charge of the polymer business of Saudi Kayan Petrochemical Company stated that the products of this new installation will supply the global market, and some of these products are aimed at the Chinese market. He said that in 2012, the global demand for polymer will increase by an average of about 6%, which is higher than the growth rate of global GDP. The growth rate of the Chinese market will reach double digits.
Thanks to its rich natural gas resources, Qatar's petrochemical industry enjoys a good momentum of development. Qatar Petroleum and Qatar Petrochemical are jointly building a new petrochemical complex in Ras Laffan Industrial City. The new consortium will include a 1.4 million tonne/year steam cracker, which will require raw materials from local gas plants. The total investment of the consortium is US$5.5 billion and is expected to be completed by 2018. Qatar Petroleum holds 80% of the stake in the project and Qatar Petrochemical will hold the remaining 20%.
It is said that the combined production capacity of high-density polyethylene 850,000 tons / year, linear low-density polyethylene 430,000 tons / year, polypropylene 760,000 tons / year, butadiene 83,000 tons / year. Products will be mainly exported to high-growth markets such as Asia, Africa and Latin America.
In addition, a new 300,000-ton/year low-density polyethylene (LDPE) plant from Qatar Petrochemical Company in Mesayid has recently started construction, and the company’s existing two 200,000-ton/year LDPE units are currently Full load operation.
Borouge is implementing a 450,000-ton/year polyethylene project at the Ruves Petrochemical Complex located about 250 kilometers west of Abu Dhabi City. Borouge was founded in 1998 and is a joint venture between Abu Dhabi National Oil Company and Borealis.
In addition, Borouge’s USD 4.5 billion Borouge 3rd phase expansion project is also under implementation. It is expected that the capacity will be expanded to 4.5 million tons/year by the end of 2013. The third phase of the project will reach full capacity in the first half of 2014. As of March 2012, 60% of the Borouge Phase III capacity expansion project has been completed. The project includes the construction of a new 1.5 million tons/year ethane cracker, two sets of Borstar patented technology, a total capacity of 1.08 million tons/year of polyethylene, and two sets of Borstar patented technology with a combined capacity of 960,000 tons. /year polypropylene plant, and a low density polyethylene unit with a capacity of 350,000 tons/year.
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