Middle East set to benefit as petrochemical demand grows

Strong worldwide demand for petrochemicals, particularly in China, is prompting many oil and petrochemical producers to build new ethylene capacity. China itself has extensive plans for capacity additions, as do some other Asian countries, but the largest increase looks set to come from the Middle East. Here, the growth will be based on access to abundant low-cost feedstocks, especially gas, which will give the region a considerable advantage over regions dependent on expensive oil-based feedstocks, including much of Asia. The exploitation of gas-based feedstocks has enabled the Middle East to build up a significant presence in world ethylene markets already. Since 2000, it has been the largest exporter of ethylene and its dominance could grow considerably over the coming decade, largely at the expense of the US. On present projections of demand and capacity, the Middle East is likely to account for well over 90% of the world's net trade in ethylene by 2010, with China as its principal market.