Persian Gulf petrochemicals output seen little changed in 2022: SABIC CEO

Petrochemicals production in the Persian Gulf region will be little changed in 2022 compared with this year, the CEO of Saudi Basic Industries Corp. said Dec. 8.

Output will be "more or less like 2021," Yousef Al-Benyan told S&P Global Platts at the Gulf Petrochemicals and Chemicals Association's annual meeting in Dubai. He also announced that the GPCA will have its annual forum on a rotating basis among the Gulf Cooperation Council capitals, with the next meeting to be held in Riyadh next year.

Gulf petrochemicals production this year was expected to hold steady at 175 million mt as key export destination China embarked on a self-sufficiency drive, the GPCA Secretary General Abdulwahab al-Sadoun had told Platts in June.

Output was up 1 percentage point in 2020 over 2019, according to Benyan.

The pandemic has delayed or prompted the reconfiguration of some petrochemicals projects in the region, with the most high-profile change occurring in Saudi Arabia's $20 billion crude-to-chemicals project -- a joint venture between Saudi Aramco and SABIC that was downsized. Qatar's Ras Laffan petrochemicals project, along with the al-Zour and Duqm developments, were also pushed back during the pandemic.

Now there are moves toward an expansion in the region. SABIC, the biggest petrochemicals maker in the Middle East that is 70% owned by Aramco, and Oman's state-owned energy company OQ said Dec. 6 they signed a memorandum of understanding to study the development of a petrochemicals project in the Duqm Free Zone.

Persian Gulf producers have a competitive advantage over some of their peers because they use natural gas as feedstock, whose price is fixed, as opposed to rivals in Asia that rely on naphtha, an oil byproduct whose price goes up with an uptick in crude prices, the GPCA's secretary general said in June.