GPCA ’22: Petchems oil demand to remain robust in net zero scenario – Aramco chief
RIYADH (ICIS)–The petrochemicals sector is likely to remain a substantial driver of crude oil demand even in a net zero emissions scenario, with a focus on decarbonising building block materials key to meeting carbon-reduction targets, CEO of Saudi Aramco, Amin Nasser, said on Tuesday.
Saudi Arabia is planning to channel 4m bbl/day of crude output into chemicals production by 2030, and it is increasingly necessary in the energy transition for the sector to research and develop sustainable advanced materials for industrial-scale use in sectors such as housing and infrastructure.
“Global net zero emissions targets will not be met without successful materials transition,” said Nasser, speaking at the GPCA conference in Riyadh.
With the global population expected to reach 10bn people by 2060, and 80% of them expected to be living in cities, demand for materials is likely to increase sharply, to around 167 gigatonnes, Nasser said.
“With materials already accounting for 25% of global greenhouse gas emissions, decarbonising that space has been an under-discussed facet of the energy transition,” he added.
Despite the current global focus on emissions reduction, petrochemicals are expected to be one of the key sectors driving future oil demand growth, with consumption from the sector expected to continue to rise into the future as demand from other sectors starts to taper, according to the International Energy Agency (IEA).
Even in the case of a successful net zero energy transition, petrochemicals could represent around half of crude oil demand growth by the middle of the century, according to Nasser.
The growing focus by Gulf region oil and gas players to diversify their portfolios downstream into petrochemicals comes at a point where the energy crisis, following the onset of the war in Ukraine, is making basic chemicals production increasingly uncompetitive in Europe, Nasser added.
This shift and the uncertainty of future energy pricing in Europe as the region moves to transition away from Russian natural gas makes Saudi Arabia and the wider GCC increasingly attractive for new international chemicals sector investment, he added.
“The energy crisis is forcing many chemicals companies to cut operations or shut down, especially in Europe … It has never been more attractive for overseas chemicals companies to invest here,” he said.
Front page picture: Saudi Aramco’s CEO Amin
Nasser; archive image
Picture source: Jon Gambrell/AP/Shutterstock
Focus article by Tom Brown
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