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Arab Petrochemical Production Exceeds 150 Tons in 2016

Arab Petrochemical Production Exceeds 150 Tons in 2016

Tuesday, 31 October, 2017 - 06:15
The total production of petrochemicals in the Arab countries exceeded 150 million tons in 2016, said a recent OAPEC study. (Reuters)

The total production of petrochemicals in the Arab countries exceeded 150 million tons in 2016, said a recent study by the General Secretariat of the Organization of Arab Petroleum Exporting Countries (OAPEC).

The study, entitled “Petrochemical industry in the Arab countries,” said the petrochemicals and basic thermal polymers are considered among the most important products of Arab countries in this regard.

It added that the petrochemical industry has occupied an important position in the world since the 1990s to date, noting that the total design capacity of ethylene production in the Arab world reached about 26 million tons in 2016, accounting about 14.7 percent of world production.

The production of propylene was about 9 million tons in 2016, equivalent to about 10.2 percent of world production. This indicates that the production capacity of methanol is about 13 million tons per year, which represents about 10.6 percent of global production, while the Arab countries’ production of thermal polymers increased to about 29 million tons.

In the last decade, the petrochemical industry in the Arab countries has faced many challenges driven by the rapid development of its production in some major oil consuming countries relying on advanced technology.

The study highlighted the developments seen in the industry, such as the discovery of shale gas and its commercial production in the United States, and China's success in leading the global demand for petrochemicals by applying its own new technology to convert coal to petrochemicals. OAPEC’s study suggested that this is expected to increase China's ethylene production to 30 million tons per year by 2020.

The study said the difficult conditions faced by the oil market as a result of the decline in oil prices since mid-2014 have contributed to the increasing challenges in the Arab countries’ petrochemical industry, especially following the drop of naphtha’s prices, and the growing competitiveness of the petrochemical industry in Asia and Europe.

The study concluded with a set of recommendations that will contribute to tackling these challenges, and the most important of which are: the pursuit of cooperation with a global strategic partner; efforts to increase the integration between the refining and petrochemical industries to maximize the benefits of joint facilities and increase profitability; expansion of the small and medium projects that rely on petrochemical products, as well as the start-up of "green petrochemical" industries, which rely on the production of chemicals from renewable sources of non-food, and agricultural waste; provision of appropriate conditions for planning and restructuring for re-establishment of balance in the markets; and improvement of competitiveness.

For its part, the OAPEC’s General Secretariat praised the efforts of the Arab countries in this vital sector, wishing more joint projects, cooperation and coordination in the field of scientific research and development among all Arab countries, with taking into account the application of standards in the petrochemical industry, and encouraging manufacturing industries to help export more products of high economic value to global markets.

It also asserted that the petrochemical industry has received special focus from most Arab countries, especially OAPEC’s member states, in view of the industry’s vital role in enhancing financial revenues as a major axis in industrial development, and an important pillar in the manufacturing and consumer sectors.

The Arab countries have a set of natural resources and assets that enable them to build an advanced petrochemical industry, the most important of which are the availability of raw materials from natural gas and oil derivatives at competitive prices, a market characterized by high consumption rates, and a special geographical location between the East and West.

Most Arab countries are making great efforts to develop petrochemical industries in order to achieve the important strategic objective of diversifying oil export revenues. They are also making their best to pump more investments, transfer modern technologies, develop the national workforce’s skills and prepare the necessary infrastructure for the industry.

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