22 November 2012 16:26 [Source: ICB]
Ethylene is a key building block in the petrochemical industry. In recent years, the world has witnessed its largest ethylene capacity expansion, with capacity growing at a compound annual growth rate (CAGR) of 4% between 2007 and 2012, to reach 155.9m tonnes in 2012.
Most of the new capacity during this period has come onstream in the Gulf Cooperation Council (GCC) countries and Asia, particularly China, which have seen average annual growth rates of nearly 15% and 14%, respectively.
In 2012 alone, GCC countries added 2.1m tonnes/year of ethylene capacity, which accounts for 47% of the global ethylene capacity additions in the same year. While worldwide 2012 capacity additions are much lower than the record additions recorded in 2010 when 11.4m tonnes/year of ethylene capacity was added, GCC capacity addition in 2012 was at a similar level as in 2010, trending downwards by only 13%.
Looking at the Arabian Gulf region, the majority of capacity additions between 2007 and 2012 took place in Saudi Arabia, which accounted for 64% of the regional capacity additions. With 17.5m tonnes/year, Saudi Arabia is the largest ethylene producer in the region, accounting for 72% of the regional ethylene capacity. This is up by 7.7m tonnes/year compared with five years ago. This massive expansion in ethylene production capacity has resulted in Saudi Arabia becoming the third largest producer worldwide, accounting for 11% of global ethylene capacity.
In Qatar, ethylene is produced by three major companies with a combined capacity of 3.2m tonnes/year, representing 21% of GCC total. QAPCO, Q-Chem and Ras Laffan Olefins Co are the main ethylene producers in Qatar. Since 2007, Qatar ethylene capacity has grow at a CAGR of 21%, which is one of the fastest growth rates in the region. Considering worldwide ethylene producers, Qatar has reached 13th position in terms of its 2012 annual ethylene capacity.
In Kuwait, players like EQUATE and PIC jointly produce 1.6m tonnes/year of ethylene, accounting for 7% of the regional capacity. Natural gas feedstock availability remains one of the key challenges for growth of petrochemicals sector in Kuwait. The country plans to increase production of gas through reduction of gas flaring and new drilling. In this regard, Kuwait Oil Co (KOC) is developed its gas exploration program with a key objective of increasing gas production in future years. On a global level, Kuwait is ranked 21st among 59 ethylene producers in terms of ethylene capacity.
The petrochemicals industry of the United Arab Emirates (UAE) is situated in Abu Dhabi, which aims to create a globally competitive, integrated industry. Since 2007, ethylene capacity expansion in Abu Dhabi has been the highest in the region, with a CAGR of 28%, taking the total capacity to 2.1m tonnes/year in 2012. This is 9% of the region's total ethylene capacity. The petrochemicals sector has been named as one of the key engines of growth for the economy under Abu Dhabi's 2030 master plan.
Currently Borouge is the sole ethylene producer in the UAE, while future plans entail development of ChemaWEyaat, which will crack naphtha to produce ethylene and more specialist materials within the aromatics, C3 (propane) and C4 (butane) value chains.
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