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Mon 12 Jan 2009 04:00 AM

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No more shocks

Greater collaboration might be the answer to 2009's questions.

The regional petrochemicals sector came together in Dubai, for the most successful Gulf Petrochemicals and Chemicals Association annual forum to date last month, and the overwhelming sense of optimism was hard to suppress.

The event attracted over 900 key delegates and dignitaries, as well as headline speakers from the USA and China. The message was resoundingly clear from the outset. Yes, the industry face some tough months ahead. No, the drive and ambition of regional companies is not and cannot be dampened.

In the opening panel session the question of greater Gulf cooperation was raised and the guest of honour, Abdulla Bin Hamad Al-Attiyah, Deputy Premier of Qatar, responded in the affirmative.

"If we're talking about a greater GCC gas pipeline, then I will invoke the words of Martin Luther King ‘I have a dream.' This is still my dream," he said, musing that politics was in fact the barrier.

The response seemed to hit the nail on the head, and brought a spontaneous and rapturous applause from the assembled crowd. The sentiment is no doubt right, but it raises a key issue as the new year dawns. Each and every company operating in the petrochemicals sphere in the Middle East probably has just a great a dream of success, and perhaps cooperation is where the key to riding out the bumpy months ahead lies.

Too much of any product joining the market causes a shock, and one that in the long-run, will harm producers and consumers alike. Shortages in the market and sky-high prices only help the plant in full production that day. The wider producing community is clearly in distress if it cannot get the same product to market.

A timely approach to the launching of new capacity is clearly going to deliver benefits to all concerned. The Middle East sits on the most abundant concentration of feedstock anywhere in the world. To squander that advantage by ruthlessly cutting neighbours out of the market seems short-sighted.

"No single country or company can achieve all that we can achieve by working together," said Hamad al-Terkait, GPCA vice chairman and CEO of EQUATE. Seems fair.

Daniel Canty is the editor of Petrochemicals Middle East.

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