Feedstock frenzy

Secure a source for the basic materials and the rest will come.

The refining and petrochemical industry in the Middle East is on the cusp of greatness. What other way is there to describe an industry where growth figures in some sectors exceed 1000%?

Petrochemicals Middle East launches into an environment where Saudi Arabia, Kuwait, Qatar and the UAE are spending billions on developing a refining and petrochemical infrastructure, both to develop and process the feedstock.

The governments of these countries are also trying to attract investment and technology into the industry. Markets, especially the voracious Indian tiger and Chinese dragon, are clamouring for the end products. Feedstock though is the key.

Without it projects get put on hold and investors look elsewhere. However, with a guarantee of the right supply at the right price, producers here can expect to see investors queuing up to get a piece of the action.

They will also be able undercut their international competition, especially in Asia, where as one analyst put it 'there will be blood in the water'.

Predictions are that this will lead to international consolidation throughout the petrochemical sector. Plant of one sort or another may scale back production or shut altogether. Any closures may in turn lead to another kind of building project, a reconstruction of sorts.

Earlier this year a joint venture between TransAsia Gas International and Star Petro Energy was busy trying to increase the partnership's downstream assets. One project the companies were involved in was the relocation of a disused refinery from Italy to Pakistan.

A combination of new parts and refurbishment will create a 100 000 bpd refinery by 2010, considerably quicker than any new build project could manage.

Given the relative scarcity of some core materials and skills, moving redundant plant around the world may become a viable option if there is a good profit to be made from the result. Again though, it all comes down to getting hold of the feedstock.

Stuart Matthews is the senior group editor of ITP Business.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM