EPCA ’08: Invest in Gulf to prosper - GPCA

29 September 2008 13:53  [Source: ICIS news]

GPCA says smart money is heading for MideastMONTE CARLO (ICIS news)--European petrochemical players must invest in the Middle East or face feedstock shortages in years to come, the Gulf Petrochemicals and Chemicals Association (GPCA) said on Monday.

Speaking on the sidelines of the European Petrochemical Association (EPCA) meeting, GPCA secretary general Abdullah S bin Zaid al-Hagbani told ICIS news that the Gulf region will refine an increasing proportion of its oil domestically, meaning there would be less product available for export to Western refiners and downstream consumers.

Western petrochemical companies needed to act now, he said, by cooperating with Gulf companies to ensure they would have access to chemical feedstocks in the future.

Gulf petrochemical players would also diversify their portfolios away from just gas to include other feedstocks such as naphtha, to take advantage of refinery by-products, Al-Hagbani said.

A logical next step would also be integration of refining and petrochemical companies in the Gulf region to guarantee feedstock availability.

"In 20 years' time, if you are not tied up with a refiner or have global reach you will have problems," he said, adding: "By 2025 there will be a shortage of available feedstocks in Europe."

Al-Hagbani pointed to Total, Dow, ExxonMobil and Sumitomo as successful examples of western companies which have acted early to build a business in the Gulf.

Most of the new Middle East polymer capacities will come into commercial production in the second half of 2009, said Al-Hagbani, adding economic recovery by the time full production is reached in 2010 should mean that markets will cope well with the new volumes.

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By: Will Beacham
+44 20 8652 3214

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