Doha: Even with the Middle East’s fertilizer capacity expected to grow to 50.4 million tonnes by 2016, global developments in the petrochemical sector are set to have serious repercussions on the future of the industry, warns the Gulf Petrochemicals and Chemicals Association (GPCA), the region’s longest standing trade association.
According to GPCA estimates, the GCC’s fertilizer production capacity reached 31.4 million tonnes in 2012, a 10 percent increase on the previous year, while the global fertilizer industry grew by just 2.2 percent in the same period. Sector growth was aided by ready access to locally sourced oil and gas and further investment in modern infrastructure.
Currently, about half of the fertilizers produced in the GCC are exported. The financial returns benefit Gulf economies but these trade flows may be affected in the near future as more favourably priced raw materials become available to competitors on the back of the North America shale gas boom, the GPCA said.
“As the economy of the Middle East is so closely tied to the oil and gas industry, any global trends associated with it — be it here, or on the other side of the world — cannot be ignored,” said Dr Abdulwahab Al Sadoun, Secretary General of the GPCA.
In a bid to support the region’s fertilizer industry, GPCA will host the fourth Fertilizer Convention from September 22-24 in Dubai, with discussions centered on tackling global trends. Co-organised by CRU, the independent consultancy group specialising in fertilizers, an audience of over 300 senior industry professionals will benefit from key insights into ensuring the sector’s sustained growth.
The GCC fertilizer industry, in particular, is tipped to be affected by the rise in shale gas production. According to preliminary GPCA estimates, 1.7 million tons of fertilizers were exported to North America in 2012, making it the second largest export market for GCC fertilizers after Far East Asia. “The North American shale gas revolution will give local chemical companies access to cheaper raw materials like nitrogen and sulphur—key components in fertilizers,” said Dr. Sadoun.
“Fertilizer producers in the GCC may lose ground in an important export market if this happens.”
The influence of US shale gas production on the Middle East’s industry will be the main focus in a session titled ‘The North American shale gas revolution’ on September 23.
“With the rapid development of shale gas, it is vital that Middle East fertilizers evolve in order to realize their growth potential. At the GPCA Annual Fertilizer Convention, we invite delegates to explore and discuss issues that are globally relevant, with a view to finding solutions that can help the region’s fertilizer industry gain a greater share of the petrochemicals sector,” said Dr Sadoun.
The Peninsula
