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Chemicals vital to Gulf’s economic diversification strategy

Diversification is helping the chemicals industry grow in the Middle East

Oscar Rousseau is deputy editor of Construction Week.
Oscar Rousseau is deputy editor of Construction Week.

Saudi Arabia is leading the region by spending billions of dollars on new chemical plants. While the cash earmarked for chemical-producing facilities pales in comparison to investment in real estate, power, and transport, the Gulf’s economic diversification is helping to keep the market segment in good form.

Manufacturing is one of the sectors GCC governments want to ramp up to wean oil-dependent economies away from volatile petrodollars. This makes sense given the erratic value of Brent crude, which reached a four-year high of $81 dollars per barrel in October. Today, the price has dropped again and is hovering around $60 per barrel.

As the world’s largest oil exporter, Saudi Arabia’s economic diversification strategy is advancing apace. Localisation is at the heart of its manufacturing push and its multibillion-dollar crude-oil-to-chemical plant will play a prominent role, creating up to 30,000 direct and indirect jobs. Set to start operations in 2025, the plant will be co-developed by Saudi Aramco and Sabic, and is expected to process 400,000 barrels per day of crude, making millions of tonnes of chemicals and base oils per year.

Emirates Global Aluminium’s under-construction alumina refinery, Al Taweelah in Abu Dhabi is another complex that will contribute to economic diversification and job creation. It is expected to provide a $272m (AED1bn) bump to the UAE’s gross domestic product and create up to 600 jobs.

READ: US's Jacobs sells energy, chemicals unit to Worley Parsons for $3.3bn

When it comes to petrochemical plant construction, meanwhile, the senior vice president for the Middle East and North Africa operation of engineering firm McDermott, Linh Austin, is exploring a modular methodology for onshore and offshore projects. “We are opting for modularisation wherever it makes sense, like in liquefied natural gas and ethylene facilities. We apply modularisation to reduce safety issues and costs, and to be consistent in quality,” he says.

Putting the types of products produced by these new facilities to use within the construction sector, our Knowledge Partner Fila’s regional commercial director, Fabrizio Nicoli, says chemical sealers should be used to protect the façades of heritage buildings from sun damage. The chemicals used to restore and maintain historical architecture need to be strong enough to clean tough surfaces without causing damage to the fragile exterior of an old building.

Nicoli adds that the UAE has a “long-term vision” for the construction of new landmarks, in which chemical pre-treatment of façades is increasingly being considered necessary. This is exemplified in the work carried out at the new Presidential Palace in Abu Dhabi, where internal and external surfaces were thoroughly pre-treated during construction to stop the stone from yellowing over time.

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Construction Week - Issue 747
Aug 03, 2019