APLA ’06: Mideast leads next decade - consultant

14 November 2006 14:37  [Source: ICIS news]

RIO DE JANEIRO (ICIS news)--The Middle East will become the global centre of petrochemical production in the next decade due to its enormous feedstock availability and low production costs, a US-based consultant said on Tuesday.

The Middle East’s advantage is that producers in the region crack ethane – rather than naphtha – to make petrochemicals, said George Intille of SRI.

“Ethane crackers are less costly to operate because they need lower capital investment to be implemented,” he told the 26th annual meeting of the Asociacion Petroquim y Quimica Latinoamericana (APLA).  

In addition, natural gas in the Middle East is a fraction of the cost in North America and Europe. Natural gas is at least five times more expensive in the US than in the Saudi Arabia, he said.

Although an increase in Middle Eastern natural gas prices will eventually happen, the cost of the feedstock is unlikely to match prices elsewhere in the world, he said.

Petrochemical installed capacity will grow exponentially in the Middle East between now and 2015, said Intille.

The region will account for 20% of the world’s ethylene supply in about 10 years, up from less than 5% now, he said.

The APLA meeting in Rio de Janeiro ends on Tuesday.
By: William Lemos
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