(MENAFN - Arab News) At 86.4 million tons, Saudi Arabia accounted for more than 60 percent of the region's total petrochemicals capacity in 2012
Petrochemicals production in Saudi Arabia hit 86.4 million tons in 2012, up from 80.5 million tons of capacity in the previous year, according to the Gulf Petrochemicals & Chemicals Association (GPCA) Annual Report 2012.
Now in its sixth edition, the annual report provides a comprehensive overview of the major developments of the GCC petrochemicals industry in each of the Gulf countries.
As per the findings of the annual report, Saudi Arabia dominates the regional market with a 67 percent of the GCC's total petrochemicals capacity.
The notable milestone reached in 2012 was the commencement of full operations of the Saudi Polymers' manufacturing facility in October, located in Jubail. A joint venture between National Petrochemicals Company (Petrochem) and Arabian Chevron Phillips Petrochemical Company, this facility has the production capacity for 3 million tons of ethylene, polyethylene, propylene and hexene.
Saudi Arabia's fertilizer capacity continued to expand when in June 2012, SAFCO awarded a 500 million contract to build a large-scale fertilizer complex. When fully on-stream, this plant will have the capacity to produce 1 million tons of urea every year.
Saudi companies like Saudi Basic Industries Corporation (SABIC) and Saudi Aramco also ventured into overseas projects last year. In January 2012, SABIC signed a cooperation agreement with China's Sinopec that involves the building of a new polycarbonate production facility in Tianjin, China with a capacity of 260,000 tons per annum. SABIC and Sinopec further solidified their business partnership by agreeing to study the development of a methanol complex in Trinidad and Tobago.
Saudi Aramco, meanwhile, signed a memorandum of understanding with PT Peramina to evaluate the possibility of developing an integrated oil refining and petrochemicals project to meet the rising demand in Indonesia and Southeast Asia.
"The entry of SABIC and Saudi Aramco into the Asian markets is a positive development as it means that the GCC petrochemicals sector has truly gone global," said Abdulwahab Al-Sadoun, secretary general of the GPCA.
Production of petrochemicals in the GCC market increased by 5.5 percent in
2012, despite a global slowdown in chemical production due to market weakness, the report said.
The regional petrochemicals production capacity grew to 127.8 million tons in 2012, up from 121.1 million tons in 2011. Conversely, the global growth in petrochemical production stood at 2.6 percent in 2012, compared to 3.8 percent growth rate in 2011.
The latest report describes 2012 as a year in which the industry has flourished, even though chemicals production worldwide had decreased due to the recession in Europe, inventory discrepancies and deterioration in global manufacturing.
"As a host of major projects come online, along with a collection of significant new agreements, the GCC petrochemicals industry is demonstrating their potential as a market leader," said Al-Sadoun. "The GPCA is pleased to announce this market growth and to recognise the contribution of every industry player across the region."
The GCC petrochemicals sector is forecast to reach a production capacity of 183.9 million tons by 2017, a 7 percent annual growth rate over the next four years.
"We are optimistic about the future," Al-Sadoun added. "Industry growth will usher in a transformation for the petrochemicals sector into one that is focused on technology, sustainability and enduring partnerships."
SABIC, for example, is already making great strides toward a bigger and brighter future by developing the world's largest integrated methacrylate (MMA) and polymethylmethacrylate (PMMA) plant in the world. When completed, this plant will produce 250,000 tons per annum of MMA and 40,000 tons per annum of PMMA.