GCC investments in petrochemicals have a “strategic importance” as they help grow economies and satisfy the increasing demand for petrochemical products, HE the Minister of Energy and Industry Dr Mohamed bin Saleh al-Sada has said.

In his plenary address at the the 9th Annual Forum of the Gulf Petrochemicals and Chemicals Association (GPCA) in Dubai recently, he said, “Qapco’s birth in Qatar some 40 years ago marked the start of the GCC’s petrochemical industry, creating a new set of opportunities.”

Al-Sada said three developments would influence the region’s petrochemicals industry. “As oil prices reach their lowest levels in four 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.

UAE Minister of Energy Suhail Mohamed Faraj al- Mazrouei also spoke. 

The GCC petrochemicals sector is entering a promising phase in its development and has to leverage opportunities in order to overcome challenges from global competition, GPCA said in a release.

According to GPCA, GCC’s petrochemicals capacity reached 140.5mn tonnes in 2013, an 8.7% increase from 2012. The sector is also profitable: revenues figures from the region hit $89.4bn in the same year, a 7.3% growth from the previous period.

Al-Falih said that regional development in petrochemicals has focused on manufacturing commodities, however, developments in other markets may prove to be significant.  “North American chemicals will double in the next decade, giving them capabilities to be in markets that we thought were traditionally ours,” said al- Falih. “European markets are closing down their inefficient plants. And China is changing as well… it is growing relatively slower, however Chinese companies are looking at coal to chemical opportunities.”

Khalid al-Falih, President and CEO, Saudi Aramco spoke about 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.

“As the region sees an increase in the population of young people, we will see an entirely new generation of men and women. About 60% of the workforce at Saudi Aramco will be 35 years or less by the end of the decade. Young people today are simultaneously more sceptical and hopeful than my generation ever was.

“Ultimately, the Gulf is well on its way journey towards a period of prosperity and progress. We are in the golden decade for the Gulf region and for the petrochemicals industry and it’s a once in a generation opportunity,” al- Falih added.

Andrew Liveris, Chairman and CEO, Dow Chemical Company said, “One of the few certainties in this world is energy, and in this world of fossil fuels, there is no guarantee that this will be used to its full advantage.

“Yes, the Middle East will still export hydrocarbons, but more and more people in the region are beginning to understand the potential of hydrocarbons to create jobs and to add value to the economies. This is why the future will be defined by young men and women who can run this industry.”

Liveris said the plans behind Sadara, the Saudi Aramco-Dow Chemical joint venture, illustrate an ideal scenario for the petrochemicals industry. The multibillion dollar integrated facility is notable for being the largest petrochemicals plant built in a single phase, and is expected to be a hub for manufacturing, research and job opportunities.

“When completed in 2015, Sadara will be run by the 4,000 Saudi men and women who will return home from different Dow facilities around the world. After all, human resources are the only resources that really matter,” Liveris added.

The 9th Annual GPCA Forum hosted more than 2,000 international and regional chemical industry executives.