New mega projects will boost the UAE's investment in the petrochemicals industry to nearly USD 12 billion by 2015 to maintain its position as a major global producer of the gas based substance.
According to official data, the investments are part of USD 50 billion projects to be set up in the petrochemical sector in the 6 nation Gulf Cooperation Council which already pumps nearly 17% of the world's total chemicals output showed the figures by the Dubai based Gulf Petrochemicals and Chemicals Association.
The funds will boost the GCC's total petrochemicals investments to nearly USD 250 billion in 2015 accounting for more than half the overall industrial investment in the 31 year old Gulf economic, defence and political alliance.
Mr Rashid bin Fahd secretary general of GPCA said that "In the UAE, total petrochemicals investments are expected to reach around USD 12 billion by the end of 2015."
His figures showed that Saudi Arabia, the world's dominant oil exporter and the largest Arab economy accounts for 67% of the GCC's industrial output while the UAE controls nearly 7% and Qatar about 14%.
Mr Fahd said that the 6 members produced around 120 million tonnes of chemicals and petrochemicals in 2011, fetching them nearly USD 75 billion. In a recent study, the Kuwaiti based Gulf Investment House said GCC petrochemical projects are highly feasible given the region's massive gas resources, estimated at nearly a fifth of the world's proven natural gas deposits.
It noted that natural gas is the main feedstock for the petrochemical and fertilizer sector and crude oil prices are used as a benchmark to set gas prices in international markets. But it added that gas prices are highly subsidized in certain regions of the world such as the GCC and North Africa where pre determined discounts exist which fix the price to USD 0.75 per mmbtu in Saudi Arabia.
According to GPCA, latest major chemicals projects in the region include Borouge 2 and 3 in the UAE at a cost of more than USD 5.5 billion and Saudi Kayan at a cost of around USD 10 billion. Other projects involve the USD 7 billion SIPCHEM Olefins in Saudi Arabia, the USD 5 billion Sino Saudi Petrochemical Complex, the USD 4 billion AlRajhi Jubail Complex in Saudi Arabia and USD 3 billion QP ExxonMobil complex in Qatar.
Petrochemical investments in the GCC countries which sit atop 40% of the world's extractable oil deposits are part of a long term industrialization drive intended to lessen their reliance on volatile crude sales. Official figures showed the six nations have pumped in excess of USD 250 billion into manufacturing projects, covering petrochemicals, aluminium steel, cement, paper, home appliances, machinery and other products.
