GCC Petrochemicals Industry is in a Golden Decade, say speakers at 9th Annual Forum
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, said speakers at the 9th Annual Forum, hosted by the Gulf Petrochemicals and Chemicals Association (GPCA).
The Gulfs investments in petrochemicals have a strategic importance as they help grow economies and satisfy the growing demand for [petrochemical] products, said His Excellency Dr. Mohammed Saleh Al Sada, Qatars Minister of Energy & Industry in his plenary address. QAPCOs birth in Qatar 40 years ago marked the start of the GCCs petrochemical industry, creating a new set of opportunities.
Notable guests at the Annual Forum included His Excellency Eng. Suhail Mohamed Faraj Al Mazrouei, Minister of Energy of the United Arab Emirates. Aside from H.E. Dr. Al Sada, top speakers at the event included Khalid Al- Falih, President and CEO, Saudi Aramco and Andrew Liveris, Chairman and CEO, Dow Chemical Company.
According to the GCC Petrochemicals & Chemicals Facts and Figures 2013, the petrochemicals capacity of the GCC reached 140.5 million tons in 2013, an 8.7% increase from 2012. The sector is also profitable: revenues figures from the region hit US$89.4 billion in the same year, a 7.3% growth from the previous period.
Dr. Al- Sada advised that three developments would influence the regions 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 regions 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.
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.
Al- Falih advised on 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 experiences a youth bulge, we will see an entirely new generation of men and women. 60% of the workforce at Saudi Aramco will be 35 years or under by the end of the decadeYoung people today are simultaneously more skeptical and hopeful than my generation ever was, continued Al- Falih. This generation was born with a baby bottle in one hand and an electronic device in the other [they have also] grown up multitasking so they have the potential to make their organizations more agile and entrepreneurial.
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 and for the petrochemicals industry and its a once in a generation opportunity, concluded Al- Falih.
Liveris also highlighted a focus on the potential for talent.
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, said Liveris. 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, said Liveris. After all, human resources are the only resources that really matter.
The 9th Annual GPCA Forum hosted over 2000 international and regional chemical industry executives .
For more information, please visit www.gpcaforum.net
