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Gulf petchem firms seek alternatives to gas

Abu Dhabi, June 9, 2010

Petrochemical producers in the Gulf are looking for alternative feedstocks due to a shortage of gas, officials said.

'There are alternatives; liquified petroleum gas (LPG), condensates,' Abdulwahab al-Sadoun, secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA), said.

'Those days of supplying petrochemical complexes with 100 per cent ethane are over throughout the region,' he told a conference. 'There are alternatives and those alternatives are explored.'

Petrochemical companies in the Gulf Arab region rely heavily on ethane feedstock to expand their production capacity.

In the area, output capacity increased from 4.5 million tonnes in the mid-eighties to more than 100 million tonnes currently, Sadoun said.

'The abundant availability of associated gas, ethane rich gas, had resulted in the fact that the ethylene value chain is the most developed in the gulf petrochemical industry,' he added.

'71 per cent of ethylene (in the region) is produced from cracking ethane, while only 30 per cent on a global level is produced from cracking ethane.'

GPCA is the regional umbrella organisation of petrochemical and chemical producers in the Gulf.

Saudi Arabia accounts for 50 per cent of the region's petrochemicals capacity, Sadoun said.

Saudi Basic Industries Corp (Sabic) alone had 56 million tonnes of petrochemical capacity in 2008 and plans to boost total production to 130 million tonnes by 2020.

'This momentum is likely to continue in the short-term at least with the expansion drive taking place throughout the Gulf countries, adding over 50 million tonnes of new production capacity by 2015,' Saadoun told the conference.

Saudi Arabia's Tasnee is among other companies in the world's top oil exporter considering the use of heavier feedstock due to restricted gas supplies and to diversify products, Ahmed al-Bassam, vice president for business development at Tasnee told Reuters on the sidelines of the conference. – Reuters

Tags: abu dhabi | sabic | LPG | GPCA | petchem |

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