China and Indias growing demand for petrochemicals will continue to benefit the Middle East and North African (MENA) region, say analysts.
The increasing exports to the Asian giants are expected to turn Mena into the world's petrochemical hub, according to Shailesh Dash, founder and chief executive of Al Masah Capital.He points out that the region's share of global ethylene capacity is set to reach 23.4 per cent, or equivalent to 174.8 MT per annum, by 2014 from 17 per cent, or equivalent to 132.7 MT per annum, last year.
"The MENA region is an ideal location for petrochemical production is also likely to support growth in the sector going forward. The region's proximity to demand-dense areas such as Asia led by China and India offers significant logistics advantages for petrochemical manufacturers," Shailesh Dash told the Khaleej Times.
Saudi Arabia is the region's leading petrochemical producer, currently accounting for seven per cent of the global supply of basic petrochemical products and 70 per cent of the total GCC output. The petrochemical sectors in Egypt, Qatar, Kuwait and the UAE are also growing quickly.
Dash said the Mena petrochemical producers hold a clear cost advantage over their global peers thanks to highly subsidised procurement rates of raw material. Saudi Arabian producers buy ethane from government-owned Saudi Aramco at a fixed price of US$0.75/mmbtu.
