Growth in revenue and production comes amid a flurry of activity downstream, particularly in specialty chemicals in the region
GCC chemicals producers' revenue rose 17 per cent to hit $84.2bn in 2017
Revenue from the chemicals sector in the GCC increased by 17 per cent year-on-year to reach $84.2 billion (Dh209.3bn) in 2017, as regional national oil companies add capacity and investment into growing their downstream sectors, according to a report by the Gulf Petrochemicals and Chemicals Association.
The growth rate was the “fastest since 2011” and indicated a trend towards manufacture of higher value products, the report added.
Saudi Arabia and the UAE, whose state producers Saudi Aramco and Abu Dhabi National Oil Company have made significant pivot downstream, were the main drivers behind this rise, growing 19 and 17 per cent in revenue, respectively.
"With 20 new products to be added over the next 10 years, the chemical sector will be integral to the region’s diversification efforts and the creation of new industries as regional governments aspire to construct competitive economies that are diversified away from hydrocarbons,” said GPCA secretary general Abdulwahab Al Sadoun.
In terms of production, the chemicals sector in the Arabian Gulf grew 7 per cent year-on-year to reach 166.8 per cent last year, with projected growth of 170.8 million tonnes expected in 2018.
Overseas production capacity by Gulf producers reached 18.6 million tonnes from facilities located in North America, Europe and Asia.
National oil states such as Saudi Arabia and the UAE have made significant investments abroad tapping into the North American shale gas boom.
Abu Dhabi’s Mubadala-owned Nova Chemicals and Borealis signed an agreement this year with French energy major Total to develop a $1.7bn petchems facility in Texas.
Saudi Basic Industries Corporation (Sabic), the world’s fourth-largest chemicals firm, formed a venture with ExxonMobil last year to build an ethylene plant, also in Texas, by early next decade. Kuwait’s Equate Petrochemical acquired ethylene glycol-producer MEGlobal in 2015 and is currently building a 750,000-tonne per year monoethylene glycol facility in Freeport, Texas.