Saudi Arabia Petrochemicals Report Q4 2010 - New Market Report Published

• Text size
•  
•  

New report provides detailed analysis of the Energy and Utilities market

Increasing Chinese self-sufficiency and a glut in global basic petrochemicals supplies will prompt Saudi Arabia to add value through a diversified plastics conversion industry, with the country well placed to become a regional leader, according to BMI's latest Saudi Arabia Petrochemicals Report. The joint venture (JV) between Saudi AramcoSaudi Aramco and Dow ChemicalDow Chemical to build an ethylene plant of 1.4- 1.6mn tpa capacity is set to miss its 2015 target completion date following a decision in April to move it from Ras Tanura to Al Jubail to save construction costs. The project is also to be reduced in scale. Petro RabighPetro Rabigh is also a cause of concern as its costs have risen from the initial outlay of US$4.3bn to over US$10bn. The commissioning of the Petro RabighPetro Rabigh complex began in Q209, having been delayed from Q408. Nevertheless, ethylene capacity in 2014 is forecasted to be more than double that of 2008 levels at 18.43mn tpa, with Jubail and Yanbu the focus of petrochemicals developments.

Demand growth in Asia, led by the surging Chinese market, has underpinned global petrochemicals growth and is the basis for growth in Saudi output. The Chinese polymer resins market should mirror, if not exceed, economic growth rates of 8.8% in 2010 and 7.5% in 2011, leading to a rise in prices and reversing the temporary drop in profitability seen in 2009.

With domestic demand likely to continue to outstrip supply, China will remain a net polymers importer over the medium term and the largest importer in the world. However, China will become increasingly self-sufficient and the Saudi industry will be looking at an expansion of the domestic and regional plastics conversion industry. The Gulf Co-operation Council (GCC) accounts for just 2% of the global plastics conversion market, but annual growth is expected to reach 9%-11%, making it one of the fastest growing regions over the medium term. In 2009, the GCC consumed about 2.5mn tpa of polymers, mainly in the packaging and construction markets. With its broad plastics portfolio in the region, which will be expanded further when new projects come online, Saudi Arabia represents the most promising base for downstream conversion industries.

With diversification in mind, in July 2010, the Saudi Industrial Investment GroupSaudi Industrial Investment Group (SIIGSIIG) and CP Chem subsidiary Arabian Chevron Phillips (ACP) announced plans to diversify into downstream products, with investments of about SAR1.8bn (US$480mn) from each partner. One of the projects will produce nylon-6,6, including adipic acid feedstock. At the same time, Petro RabighPetro Rabigh - a JV between Saudi AramcoSaudi Aramco and Sumitomo Chemical - is planning 17 new manufacturing units at Petro RabighPetro Rabigh II, which is scheduled for completion by the end of 2014. In July, Petro RabighPetro Rabigh signed an agreement with the National Industries CompanyNational Industries Company (Tasnee) and Saudi Advanced Industries CompanySaudi Advanced Industries Company (SAICSAIC) under which they will build a JV 120,000tpa polyether polyols plant using 100,000tpa propylene oxide feedstock from Petro RabighPetro Rabigh.

In BMI's Middle Eastern Petrochemicals Business Environment Rankings matrix, Saudi Arabia is rated as the most attractive country out of the 11 surveyed by some margin, with a score of 74.4 points. Increasing capacity is helping to push up Saudi Arabia's score, although this is slightly offset by deteriorating external and financial risk scores. The country is placed ahead of Qatar, which is in second place with 63.4 points, and a cluster of other Gulf countries that cannot compete with Saudi Arabia's feedstock or economies of scale. It is also ahead of Iran, which suffers from poor risk levels.

Browse all Energy and Utilities Market Research Reports
http://www.companiesandmarkets.com/energy-and-utilities-market-research-reports-p73.aspx?prk=ff6c37249cd13e6761482a48fc7da22a

Browse all Energy and Utilities Company Profile Reports
http://www.companiesandmarkets.com/energy-and-utilities-company-profiles-p100.aspx?prk=ff6c37249cd13e6761482a48fc7da22a

Browse all Latest Market Research Reports
http://www.companiesandmarkets.com/market-reports-trends-and-industry-statistics-p9.aspx?prk=ff6c37249cd13e6761482a48fc7da22a

-Ends-

About Us
Companiesandmarkets.com is a leading online business information aggregator with over 500,000 market reports and company profiles available to our clients. Our extensive range of reports are sourced from the leading publishers of business information and provide clients with the widest range of information available. In terms of company profiles, Companiesandmarkets.com's online database allows clients access to market and corporate information to over 100,000 different companies. We provide clients with a fully indexed database of information where clients can find specific market reports on their niche industry sectors of interest. Companiesandmarkets.com is focused on providing clients with exemplary customer service and a flexible approach to accessing business information. Our team have extensive expertise in the market research industry and are keen to provide clients advice on their research requirements and possible alternative sources of information; a model which provides clients a value for money solution to research.

Saudi Arabia Petrochemicals Report Q4 2010: http://www.companiesandmarkets.com/r.ashx?id=8675BPFEU345334&prk=ff6c37249cd13e6761482a48fc7da22a

© Press Release 2010