(EnergyAsia, April 24 2014, Thursday) — Boosted by the expansion of rail and transport infrastructure throughout the Middle East, the region’s petrochemicals trade is set for rapid growth in the coming years, predicts the Gulf Petrochemicals & Chemicals Association (GPCA).

Most of that growth will take place among the more affluent six member states of the Gulf Co-operation Council (GCC) comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

“An integrated railway network is an important catalyst in driving increased economic integration between GCC countries as it fosters the region’s development agenda,” said Abdulwahab Al-Sadoun, the GPCA’s Secretary General.

“Railways will similarly have a positive effect on the intra-regional petrochemicals supply chain as it will enhance cross-border trade within the Gulf, while minimising the risk of transporting chemicals across long distances.”

The GCC’s petrochemicals industry exports the bulk of its output, shipping out 60.7 million tons in 2012 to China, the European Union and North America.
Only 6.2% of exports occurred within the GCC region, implying great potential for growth.

“Intra-GCC chemicals trade has seen a cumulative growth of 13% over the last five years,” said Dr Sadoun. “This is a positive development as it signifies deeper trade ties within the Gulf.”

In the medium term, intra-regional trade is set to surge following the planned expansion of the GCC railway network.

“The GCC railway network will enable the region’s petrochemical companies to optimise their supply chains,” he said.

The GCC coiuntries are expected to invest US$200 billion to develop a railway network to link the six countries for the first time. The project is expected to be completed by 2018, with talks underway to connect Jordan and Iraq in a follow-up of the project.

The importance of railway connectivity will be a key focus at the upcoming GPCA Supply Chain conference to be held in Dubai from May 6 to 8.