Gulf Petrochemicals: Seize every future opportunity

On December 6, the 16th Gulf Petrochemical and Chemical Association (GPCA) Annual Forum opened
in Riyadh, Saudi Arabia.
At the meeting, the GPCA and petrochemical companies in the Gulf countries said that oil will continue to play a key role
in the path of globalized industries to net zero emissions, in addition to the widely respected new energy sources.
Even if the chemical industry completes its zero-carbon transition, demand
for oil will remain strong.
Petrochemical companies in the Gulf countries will seize every future opportunity
.

The chemical industry plays an important role in reducing emissions

In a keynote speech at the GPCA Annual Forum, Saudi Aramco President and CEO Amin Nasser said demand for oil from the chemical industry will remain strong
regardless of the energy transition.
The chemical industry plays an important role
in the global process of net zero emissions.

Nasser said the chemical industry plays an important role because of the growth
in the use of materials.
Global demand for all materials, including concrete, iron and steel, is expected to increase to 167 billion tonnes by 2060, up from 79 billion tonnes
in 2011, Nasser said.
The material and energy transitions are therefore as important as climate protection, especially in relation
to the chemical industry and its future strategy.
Without a successful materials transition, global net-zero targets will not be met
.

Nasser said that in an environment of growing demand for materials, the chemical industry must produce advanced materials that are more durable and sustainable, and need to innovate to make advanced materials as expensive as possible to metals and cement
.
The "big opportunity" for the chemical industry is to continuously and steadily supplement existing materials with more durable, sustainable and low-carbon alternatives, including polymers and
carbon-based materials.
This is the key to shaping a low-emission, more sustainable future for the
chemical industry.
As the upstream of the chemical industry, oil is naturally still an important raw material
.

Nasser said that even in the field of renewable energy, petrochemical products are still indispensable, and 8~11 tons of petrochemical-based materials
are required for every 1 MW of renewable energy installed capacity.
Based on the net-zero scenario, petrochemical production could still account for more than
half of total global oil demand by 2050.
Oil remains central
to the world's goal of achieving net zero by 2050.

Advance crude oil-to-chemicals projects

To this end, both Aramco and the Saudi government are promoting the development
of crude oil-to-chemicals (COTC) technologies and projects, Nasser said.

Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, stressed that Saudi Aramco is continuing to push downstream to convert more crude oil directly into chemicals
.
Saudi Basic Industries Corporation (SABIC) recently announced plans for Ras, Saudi Arabia al-Khair builds a COTC project
with a crude oil consumption of 400,000 b/d.
The amount and timeline for the investment of the project have not yet been announced
.
The project will be jointly built
by SABIC and its parent company, Saudi Aramco.
In addition, Saudi Aramco recently announced that it will build a petrochemical project Shaheen in Ulsan, South Korea, through its South Korean holding company, S-Oil, including a 1.
8 million mt/year mixed feedstock cracking facility that can produce chemicals from a variety of feedstocks, including crude oil, in the first commercialization
of the company's hot crude oil-to-chemicals (TC2C) technology.

Saudi Aramco previously announced that the company aims to expand COTC capacity to 4 million b/d
by 2030.
Commenting on the recently invested COTC projects, Nasser said: "These projects are an important step forward for our downstream business to demonstrate our technological innovation power
to achieve our ambitious goals.
More advanced and sustainable materials will undoubtedly strengthen the momentum
of our net-zero targets and chemicals strategy.
”

Take into account the application of chemical in the low-carbon field

In addition to COTC, the GPCA and other overseas companies said that although the local area will still play the advantages of petroleum resources, it will not miss chemical applications
in other low-carbon fields.

Nasser said low-carbon hydrogen will also play an important role
in various applications in the chemical industry.
"Low-carbon hydrogen can produce ammonia and methanol, or as clean energy for steam crackers, which in turn can produce more sustainable fertilizers, plastics and other industrial products
," he said.
Saudi Aramco and SABIC recently obtained the world's first independent certification
for the production of blue hydrogen and ammonia.

GPCA Secretary General Abdelwahab Sutton said Gulf Chemical Industry is well positioned to leverage the clean energy transition and has increased investment
in the circular economy and hydrogen development.
Sutton said the clean energy market presents huge opportunities for the Gulf region with the potential to become a world leader
in this field.
A number of green energy projects in the region, including Saudi Aramco's pilot Blue Ammonia Project, as well as Air Chemicals and Acwa Power invests $5 billion in a green hydrogen production facility
in Neom.
In addition, OQ plans to build a green hydrogen plant
in Amandulcum.

Commenting on the recent development of the Gulf petrochemical industry, Abdelrahman Al-Faji, chief executive of SABIC and chairman of the GPCA, said that the IMF recently predicted that global economic growth would slow from 3.
2% in 2022 to 2.
7% in 2023, and fears of a global recession have affected demand
for chemicals.
The Gulf chemical industry, which typically feels the effects of a global recession two to three quarters before it, is now feeling shrinking
demand for chemicals.
However, he believes that the chemical industry has always succeeded in overcoming various challenges, and the key to success is to seize every opportunity
.
By taking action like this, the GCC countries can shape a sustainable future
.