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The Middle East begins to exert power on petrochemical downstream industries
The Middle East is rapidly expanding its petrochemical industry, with major integrated projects like Petro Rabigh, Saudi Kayan’s refining complex, and the upcoming Ras Tanura refinery set to come online in the coming years. These developments signal a clear ambition for the region to extend its industrial chain and gain global market dominance. By leveraging large-scale integrated facilities, Middle Eastern petrochemical players aim to strengthen their downstream industries and capture high-value markets. At the 2008 petrochemical summit organized by CBI, Malini Hariharan from ICIS India highlighted how this strategic shift is reshaping the global landscape.
In recent years, the Middle East has seen a surge in ethylene production, leading to overcapacity in products such as ethylene glycol and polyethylene, which are now being exported in large volumes. This trend has drawn attention from both sides of the Taiwan Strait. However, industry experts note that the region still lags in propylene production and downstream processing, with lower-value products dominating the market. To address this, several Middle Eastern petrochemical companies have started prioritizing propylene development and product diversification in their strategies.
Saudi Arabia leads this transformation, with SABIC serving as a prime example. In 2006, SABIC outlined its vision to become the world's top petrochemical company, emphasizing the role of large-scale integration. Its subsidiary, Kayyan, secured technical licenses for key products like phenol, cumene, and polycarbonate, and established an industrial city in Al-Jubail with an annual capacity of over 4 million tons of chemicals. The company also announced plans to build new facilities, including a polypropylene plant and a low-density polyethylene unit, expected to be completed by 2009. These projects mark a significant step toward local production and enhanced downstream opportunities.
Sipchem, another major player, partnered with Eastman Chemical to develop acetic acid and vinyl acetate plants in Jubail, while also forming a joint venture for a methyl methacrylate (MMA) plant. Meanwhile, Saudi Aramco and Dow Chemical launched one of the world’s largest integrated projects, Rastanula, with a $15 billion investment. Expected to be operational between 2012 and 2013, it will produce a wide range of petrochemicals, further strengthening the region’s position.
Iran is also making strides, with the National Petrochemical Company planning to expand its production capacity significantly by 2015. Projects like the Razi and Kermanshah complexes are already in trial production, signaling Iran’s growing influence in the global petrochemical market.
Oman and Kuwait, though latecomers, are also advancing. Oman is developing a cracker in Aramon and an integrated facility in Duqm, while Kuwait plans to start a paraxylene and benzene plant in 2009. With abundant oil and gas resources and access to cutting-edge technology, the Middle East is poised to reshape the global petrochemical landscape. As these projects come online, the region’s downstream competitiveness is set to grow, challenging traditional players and redefining the future of the industry.