Page 9 - MEOG Week 12

MEOG FInanCe & InVestment MEOG
Petchem market said to be worth $7tn by 2027: TMR
marKets
THE petrochemical products market is expected to be worth around $7tn by 2027, according to a study published by Transparency Market Research (TMR) earlier this month. The Middle East is expected to play a major role in the sec- tor’s development.
Petrochemicals investments in Gulf Cooper- ation Council (GGC) countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, topped $140bn in 2019, TMR has said. Saudi Arabia in particular is looking to expand its downstream capabilities to offset crude oil dependency. To help build up its petrochemi- cals industry, national oil company (NOC) Saudi Aramco is preparing to take a 70% stake in lead producer SABIC for $69bn. The deal recently secured EU regulatory approval.
The integration of fuel refining and petro- chemicals and polymer production is set to be a major trend between now and 2027, providing refiners with a hedge against weak growth in gas- oline and diesel, TMR said. The petrochemicals market serves as a backbone to a number of cru- cial industries including automotive, healthcare, agriculture, textiles and consumer durables, but a risk comes from end-users looking for more eco-friendly alternatives.
Among the major Middle Eastern projects underway is Aramco’s crude oil-to-chemicals (CTC) investment in Yanbu, due to start produc- ing 9mn tonnes per year (tpy) of petrochemicals
and base oils starting in 2025.
The petrochemicals market is divided up into
demand for ethylene, propylene, butadiene, ben- zene, xylene, toluene, vinyls, styrene and meth- anol. Demand for propylene will likely increase at a compound annual growth rate (CAGR) of close to 5% between 2019 and 2027, according to TMR. Polypropylene production will account for the largest share of new propylene consump- tion, followed distantly by propylene oxide, cumene, and acrylonitrile.
Ethylene is one of the biggest petrochemi- cal segments worldwide. It was primarily used to produce polyethylene and ethylene oxide in 2018, and this is likely to remain the same throughput the period.
Methanol’s single largest outlet is set to remain formaldehyde synthesis, although other major ones include olefins production, dimethyl ether (DME) and methyl tert-butyl ether/methyl tert-amyl ether (MTBE/TAME).
The global market was highly fragmented in 2018, TMR said, and this will remain the same during the period. But by forging partnerships across the entire value chain, operators will be able to enhance their competitiveness. The big- gest players in petrochemicals include BASF, Shell Chemical, DuPont, Total, ExxonMobil, Sinopec, Saudi Arabian Oil, Sumitomo Chemi- cal, Dow, Chevron Phillips Chemical and Lyon- dellBasell Industries.™
PoLICy
US sanctions and Iran’s medical care
Iran
THE US has imposed sanctions on five com- panies based in the United Arab Emirates over facilitating the sale of Iranian oil and petrochem- icals in another round of measures targeting the coronavirus-hit Islamic Republic.
The US Treasury Department announced on Thursday that it is blacklisting the firms for buy- ing “hundreds of thousands of metric tonnes of petroleum products from the National Iranian Oil Company (NIOC)”.
The targeted companies are Ras Al Khaimah- based Petro Grand FZE and Dubai-based Alpha- bet International DMCC, Swissol Trade DMCC, Alam Althrwa General Trading LLC and Alwa- neo LLC.
The Treasury said the purchases made by the companies had contributed to the funding of
the Islamic Revolutionary Guard Corps’ Quds Force (IRGC-QF), which co-ordinates Iran’s foreign military activities with its regional allies.” The Iranian regime uses revenues from petroleum and petrochemical sales to fund its terrorist proxies, like the IRGC-QF, instead of the health and well-being of the Iranian people,” US Treasury Secretary Steven Mnuchin said in a statement.
“The Trump Administration will continue to target and isolate those who support the Iranian regime and remains committed to facilitating humanitarian trade and assistance in support of the Iranian people.”
The Treasury designation bars US citizens from doing business with the targeted compa- nies and blocks the companies’ assets in the US.
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