MOSCOW (MRC) -- Saudi petrochemicals industry is diversifying its feedstock mix and expanding its product slates to include more high value intermediates, said Saudigazette.
BMI has said that this is essential as Saudi Arabia bans imports of natural gas and its pricing structure for domestic supplies has reduced the financial incentive to explore for it.
Foreign companies have formed joint ventures with state oil firm Saudi Aramco to seek out gas deposits, but over the past 10 years they have largely failed to find commercially viable deposits. Authorities in Saudi Arabia now reportedly want to focus on the search for unconventional deposits that would require more complex and expensive technologies.
However, this rise in gas extraction costs, is expected by BMI, to increase the cost of production and undermine the industry’s competitiveness against the new threat of shale based US production.
BMI expects that Saudi Arabia will remain a robust market for petrochemicals goods, providing the basis for growth in downstream conversion sectors. In terms of the domestic market, the country is likely to remain relatively large and dynamic by Arabian Gulf standards.
Meanwhile, when it comes to petrochemicals in the UAE, BMI has said the availability of naphtha will be boosted by refinery expansion at Ruwais, helping the Emirati industry’s competitive edge and enable it to produce a wider range of products.
Also, the report said has said the global packaging market, which is a major polymer consumer, will play an important role in the industry’s growth outlook.
MRC