REGIONAL FOCUS: THE MIDDLE EAST
The history and significance of the Middle East in terms of production and transhipment of oil and petroleum products is indisputable. As the Middle East evolves from a producer, storer and transporter mainly of raw crude oil, to a producer of refined petroleum products, opportunities for the storage of such products is booming. Now the market for petrochemicals is surging too, with the main driver for new production plants being the abundance of attractively priced gas feedstock. Industry indications are that, over the next decade, current global capacity for ethylene will rise by some 30 million metric tons and, of that additional capacity, 40% will be in the Middle East. Driving sector growth right now are the record oil prices that the crude market has been experiencing, which are expected to lead to a resurgence in new refinery construction and expansion of existing plants. Other growth factors include healthy global refinery operating rates; the hungry markets - particularly for naphtha - of China and other parts of Asia; plus the Middle East's own growing product demand. Victor Shum, senior principal at energy consultants Purvin and Gertz, says: “The Middle East will continue to expand refining capacity to serve both domestic and export markets. One key demand driver of the third-party terminal services business is the profitability of the petroleum refining industry. Over the last few years, strong refinery margins and high refinery utilisation rates have increased the willingness and need to use third-party services. The anticipated high refinery operating rates should be supportive of a robust business environment for third-party terminal operators.” Mr Shun adds that although a number of refinery projects have been announced in the Middle East, the timing of these projects means that exports will not significantly increase until after 2010, since product demand in the Middle East region itself is growing rapidly.
