SR100bn boost for Saudi petrochemical industry

SR100bn boost for Saudi petrochemical industry
Updated 28 December 2013

SR100bn boost for Saudi petrochemical industry

SR100bn boost for Saudi petrochemical industry

Saudi Arabia plans to invest nearly SR 100 billion aimed to enhance petrochemical industry and raise the production capacity from the current level of 60 million tons to 80 million tons, or an increase of 33 percent, by 2015, local media said.
However, the petrochemical sector has witnessed 8.2 percent decline since the beginning of the current year in terms of revenues as investors’ fears over low global demand on petrochemical products, the media said quoting a report by Zawya, a online financial news provider.
According to the report, Saudi Arabia ranked first and second of the world’s top producing countries of methanol and ethylene, respectively, the two essential components in petrochemical industry.
The Kingdom’s share to the GCC and global petrochemical products stands at 62 percent and 8 percent, respectively, the report said.
Petrochemical industry in the Kingdom is said to have enjoyed the biggest growth in the Middle East due to its adoption of global competition strategy and resting on huge oil reserves of 264 billion barrels and 279.2 trillion cubic meters of natural gas, the report said.
Meanwhile, a report released by Alpen Capital said a big growth in the production of ethylene and poly ethylene is forecast in the Kingdom to reach 80 million tons in 2015 compared to the current level of 60 million tons.
According to the report, the Kingdom plans to pump nearly SR 236bn into new projects to stimulate petrochemical industry, a step seen to keep the Kingdom’s position as one of the best petrochemical players globally.
The low production costs and profit growth are poised to help producers to feel safe during over-supply period and boost Saudi exports, particularly in light of high production costs in the European and North American countries, the report said.
Based on data released by the (Saudi) Ministry of Commerce and Industry, the number of factories engaged in downstream industries reached 5,177 by the end of first quarter, the local media said.
According to the current plan, which ends in 2015, the number of projects concerned with petrochemical industry stands at 58, a report released by the Petrochemical Research Institute at King Abdulaziz City for Science and Technology (KACST) said.
A Saudi petrochemical expert has recently pointed out that the availability of feedstock, the Kingdom’s proximity to European and Asian markets and abundance of energy resources have contributed to remarkable growth in petrochemicals and downstream industries.
The huge investments pumped by the Saudi government into this area have made the Kingdom to be one of the largest producing countries in the Middle East in polyethylene (PE) and polypropylene (PP) products, Tasnee Chairman Mubarak bin Abdullah Al-Khafrah said.