High oil prices provide those investing in new crackers in the Middle East with a feedstock advantage. In addition, increased competition for traditional feedstocks means more natural gas will be diverted to GTL projects, which in turn provide high-value feedstocks (such as ethane, propane and butane) for other petrochemical industries. Iran’s accelerating petrochemical footprint is no coincidence. After Russia, Iran has the World’s largest natural gas reserves, closely followed by Qatar.
According to analysts, industrial gas revenue growth of up to 20 percent per annum is possible over the next five years in the Middle East, which could prove pivotal as major projects come onstream. The regional market was valued at $865m in 2005.
Middle East ethylene capacity – a yardstick for petrochemicals growth – is expected to increase by a further 300% over the next decade, around a half of new capacity worldwide. Sabic’s vice chairman and CEO Mohamed Al-Mady says: $quot;By 2010 ethylene production in Iran and the GCC countries is estimated to account for about 20 percent of the global capacity$quot;. Sabic’s ongoing petrochemical capacity expansions alone are worth some $20bn and will boost capacity from 43 to 64 million tonnes by 2008.
Qatar emerges as world GTL hub
Qatar’s industrial gas revenues grew an impressive 45 percent between 2004 and 2005 to $29m. GTL technology has thrown up a few problems in the past, but second generation GTL technology has now been developed by the oil majors, led by South Africa’s Sasol. The process is only about 60 percent thermal energy efficient, adding economic constraints. So gas-rich nations like Qatar have a number of options: exporting the natural gas to domestic markets; using it as a feedstock in GTL plants; or producing liquefied natural gas (LNG) for export.
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