Continued innovation in feedstock supply is the key to ensuring the continued development of the GCC's petrochemicals sector, advises the Gulf Petrochemicals and Chemicals Association (GPCA), the region's longest-standing trade association.
The history and growth of the Gulf's petrochemicals sector has been underpinned by advancements in feedstock supply, explains Dr. Abdulwahab Al Sadoun, Secretary-General of the GPCA, with the sector's growth aided by ready access to favourably priced natural gas from the Gulf's abundant hydrocarbon reserves.
"In the early 1970s, most of the associated natural gas the kind found in petroleum deposits was flared as the technologies to convert this fuel into liquefied natural gas had not been developed at that time and export was economically unfeasible," said Dr. Sadoun. "When the petrochemicals industry began developing in the GCC a few years later, flaring was eliminated as this sector uses associated gas as a raw material.
"This demonstrates how the Gulf's petrochemical industry has always had an innovative approach," he added.
Feedstock innovation will be explored by industry leaders at the upcoming GPCA Annual Forum in Dubai on November 19-21.
Held under the theme, "Innovation: The foundation for chemical value chain leadership", the keynote speech will be delivered by Stephen Pryor, President of ExxonMobil Chemical Co, who will focus on the development of the petrochemicals industry through innovations in feedstock supply that have led to lower cost feedstock in the US and subsequently to the revival of the US chemical industry.
Providing insight on the next steps for the regional petrochemical industry, James Gallogly, CEO of LyondellBasell Industries, will present the company's perspective on the American shale gas revolution during the forum.
The medium term outlook for the GCC's petrochemicals industry is reportedly positive. The petrochemicals capacity in the Gulf reached 127.5 million tons last year, and the GPCA estimates that this will grow to 134.5 million tons by 2016.
However, analysts have warned of a slowdown in growth caused by the availability of cheaper feedstock in the United States due to the shale gas boom. Projections from the US Energy Information Administration have shown that the United States has shale gas reserves of up to 665 trillion cubic feet. Meanwhile, shale gas reserves of 1,115 trillion cubic feet have also been found in China, however, that country has yet to exploit the production of this resource.
"GCC petrochemicals producers are likely to see sustained growth however, global markets will become more competitive in the near future," said Dr. Sadoun. "The only way to realise the sector's growth potential and to keep up with the competition is to innovate; we need to figure out how to do more, with less." Over 1,700 delegates from more than 49 countries will hear insights from more than 15 speakers at the Annual Forum, now in its eighth year. The plenary address will be delivered by H.R.H. Prince Abdulaziz bin Salaman Al Saud, from the Ministry of Petroleum and Minerals in Saudi Arabia.