GCC’s Massive Downstream Opportunities
The downstream sector in the Middle East is witnessing a significant push amid volatility in oil prices and as benefits from cheap feedstocks ease.
The petrochemicals investments in the region for 2019-2023 will jump by 50% from previous 2018-2022 outlook. According to a recent research, oil, gas and petrochemical projects valued at more than $859 billion are either underway or planned in the Middle East and North Africa.
The GCC chemical industry has made multibillion-dollar investments both within the region and in international markets. Saudi Arabia leads the new wave of future investments with Saudi Aramco's initial public offering (IPO) paving the way for further downstream investments separate to its already massive slate of new projects.
The energy giant is undertaking two massive projects in Saudi Arabia – a crude oil-to-chemicals (CTC) project in Yanbu to produce 9mn tonnes/year of chemicals and base oils by 2025; and the Amiral 1.5mn tonnes/year cracker joint venture project with France-based Total which is slated for start-up in 2024 in Jubail.
Last year in November, Saudi Arabia announced more than $2 billion worth of new petrochemical investment deals, which include an ammonia project and a polyacrylamide plant in Jubail.
Outside the Middle East, GCC chemical firms are also involved in massive upcoming projects, including a huge greenfield refinery and chemicals complex to be built on the western coast of India with an investment of $70 billion.
Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) are investing in the 1.2mn b/d complex being planned in the Maharashtra state and will be supplied with 600,000 b/d of Saudi crude.
Saudi Aramco’s refinery and petrochemical joint venture with Malaysian state oil firm PETRONAS in Pengerang, Johor state, is also expected to start soon with the 300,000 b/d refinery at the site on track to start commercial operations by the end of this year.
These developments and mergers will increase the chemical industry’s competitiveness in the GCC and globally. The industry will continue to attract new investments as the region explores high-growth markets.