KARACHI (ICIS)--The gulf railway projects, planned to link the six Gulf Co-operation Council (GCC) countries with an estimated cost of $200bn, will give a boost to petrochemicals trade in the region, the Gulf Petrochemical & Chemical Association (GPCA) said on Wednesday.
"An integrated railway network is an important catalyst in driving increased economic integration between GCC countries as it fosters the region's development agenda. The railways will similarly have a positive effect on the intra-regional petrochemicals supply chain as it will enhance cross-border trade within the Gulf, while minimising the risk of transporting chemicals across long distances, ," Abdulwahab Al-Sadoun, GPCA secretary general said in a statement.
He said the GCC petrochemicals industry, an export-oriented sector, has exported 60.7m tonnes of petrochemicals produced in 2012 to markets such as China, the EU and North America but only 6.2% of exports occurred within the GCC region.
GCC consists of Qatar, Saudi Arabia, the United Arab Emirates, Kuwait, Oman and Bahrain.
“Intra-GCC chemicals trade has seen a cumulative growth of 13% over the last five years, which is a positive development as it signifies deeper trade ties within the Gulf," Al Sadoun said.
In the medium term, intra-regional trade is set to surge following the planned expansion of the GCC railway network.
"The GCC railway network will enable the region's petrochemical companies to optimize their supply chains," he added.
Gulf Arab oil exporters are spending hundreds of billions of dollars on projects ranging from power to transport as they look to diversify their heavily hydrocarbon-reliant economies and boost regional trade.
The GCC railway network project is expected to be completed by 2018, and talks are underway to connect Jordan and Iraq once the core GCC states are linked.