New mega projects will boost the UAE's investment in the petrochemicals industry to nearly $12 billion by 2015 to maintain its position as a major global producer of the gas-based substance, according to official data.
The investments are part of $50 billion projects to be set up in the petrochemical sector in the six-nation Gulf Cooperation Council (GCC), which already pumps nearly 17 per cent of the world's total chemicals output, showed the figures by the Dubai-based Gulf Petrochemicals and Chemicals Association ( GPCA ).
The funds will boost the GCC's total petrochemicals investments to nearly $250 billion in 2015, accounting for more than half the overall industrial investment in the 31-year-old Gulf economic, defense and political alliance.
"In the UAE, total petrochemicals investments are expected to reach around $12 billion by the end of 2015," GPCA secretary general Rashid bin Fahd told an industrial conference in Dubai this week.
His figures showed Saudi Arabia, the world's dominant oil exporter and the largest Arab economy, accounts for 67 per cent of the GCC's industrial output while the UAE controls nearly seven per cent and Qatar about 14 per cent.
The six members produced around 120 million tons of chemicals and petrochemicals in 2011, fetching them nearly $75 billion, Fahd said.
In a recent study, the Kuwaiti-based Gulf Investment House said GCC petrochemical projects are highly feasible given the region's massive gas resources, estimated at nearly a fifth of the world's proven natural gas deposits.
It noted that natural gas is the main feedstock for the petrochemical and fertilizer sector and crude oil prices are used as a benchmark to set gas prices in international markets. But it added that gas prices are highly subsidized in certain regions of the world such as the GCC and North Africa, where pre-determined discounts exist which fix the price to US$0.75 per mmbtu (in Saudi Arabia).
According to GPCA , latest major chemicals projects in the region include Borouge 2 and 3 in the UAE at a cost of more than $5.5 billion and Saudi Kayan at a cost of around $10 billion. Other projects involve the $seven-billion SIPCHEM-Olefins in Saudi Arabia, the $five-billion Sino-Saudi Petrochemical Complex, the $four billion AlRajhi Jubail Complex in Saudi Arabia and a $three-billion QP-ExxonMobil complex in Qatar.
Petrochemical investments in the GCC countries, which sit atop 40 per cent of the world's extractable oil deposits, are part of a long-term industrialization drive intended to lessen their reliance on volatile crude sales.
Official figures showed the six nations have pumped in excess of $250 billion into manufacturing projects, covering petrochemicals, aluminum steel, cement, paper, home appliances, machinery and other products.