Middle East Analysis


HIGH OIL prices has certainly changed the investment climate in the Middle East and the number of projects involving air separation plants is significantly rising. However, not all is good news for our industry as we have seen recently the “postponement” of major GTL projects which would have boosted demand of oxygen to near on 100,000 tpd in Qatar alone.

Currently, the Middle East accounts for about 2 percent of the total value of the industrial gases business. We define the region as Turkey, the East Mediterranean Countries and the Arabian/Persian Gulf States. The largest sized market is that in Saudi Arabia, which according to John Raquet is about $325m in size (see Figure 1). However, this is very much boosted by the large on-sites business that exists in Al Jubail and in Yanbu and managed by NIGC, a SABIC subsidiary. This sector will determine the size and growth for industrial gases over the next 10 years and is worth particular attention.

On-site supply schemes
Most interest in the region, particularly from the major international gas companies relates to the supply of oxygen and nitrogen to petrochemical, chemical and refining operations spread across the Gulf. In most countries, it has been traditional for such plants to be sold to the end-users and operated as a “captive” plant. The first change in this started in Saudi Arabia way back in 1984, when the Al Jubail petrochemical complex was first being developed. A specific company was set up to supply the complex – NIGC – a SABIC subsidiary but with 30% ownership of privately owned companies in the Kingdom. According to Raquet’s definition, if a company develops a pipeline system and invoices for the supply of gases and services, then it is an on-site – even if 90% of the customer base is a parent company or its subsidiaries.

So the Al Jubail on-sites facility has been present for over 20 years. NIGC evolved this to the second petrochemicals complex in Yanbu in the late 1990s and now owns and operates two pipeline supply networks in the Kingdom.

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