Abu Dhabi - Mubasher: The UAE is expected to achieve an annual growth rate of 8-10% in the petrochemical sector over the next five years .

In a recent report issued Sunday, the Abu Dhabi-based Interregional Center for Strategic Analysis predicted that the UAE's petrochemical production will reach 20 million tons annually, as it targets increased production of polyolefins and specialty chemicals to keep pace with growing global demand .

According to the Gulf Petrochemicals and Chemicals Association (GPCA), the UAE accounted for approximately 18.6 million tons of the Gulf's total petrochemical production in 2021, supported by expansions in the petrochemical industry, particularly in Abu Dhabi, and based on past trends and current investments .

Abu Dhabi is the country's main petrochemical industry hub, with major companies such as ADNOC implementing massive strategic projects. Dubai is working to strengthen its position as a regional industrial platform and logistics hub serving global export operations. Areas such as Jebel Ali have been developed, hosting a number of companies specializing in the manufacture of chemical products, such as chlorine and its derivatives. Logistics infrastructure has also been developed to facilitate transportation and export operations .

Some indicators highlight the sector's growth, most notably: Borouge achieved profits of $1.23 billion in 2024, a 24% increase compared to 2023. Its sales also rose to 5.3 million tons, the highest level the company has ever reached .

The increase in production is driven by major expansion projects, such as the Ta'zeez project in Ruwais, investments by Borouge, and the move towards producing advanced, value-added petrochemicals. ADNOC's acquisition of global chemicals companies is also boosting the sector's growth .

The Interregional Center for Strategic Analysis' report confirmed that the UAE continues to strengthen its position in the petrochemical sector, benefiting from massive investments and expansion projects aimed at diversifying its economy and boosting local production to maximize the benefits of oil. The country also possesses clear strategies to enhance its global position in the petrochemical industry by implementing ambitious future projects .

According to the report, these projects are based on a long-term vision to diversify the economy, enhance added value, and achieve self-sufficiency in chemical production, while keeping pace with the global trend toward sustainability and reducing carbon emissions .

The report added that the UAE's industrial sector has witnessed several strategic developments that have strengthened the country's role as a major player in industry regionally and globally. The most notable developments include: The Abu Dhabi National Oil Company (ADNOC) completing the $13 billion acquisition of Covestro, a German company specializing in the production of advanced chemicals. This acquisition enhances the UAE's capabilities in the production of specialized chemicals and opens new markets for its products .

ADNOC, in partnership with Austria's OMV , announced the merger of their petrochemical assets to create Borouge Group International, with a market value of $60 billion. The goal is to expand polyolefin production operations, making the group the fourth-largest company in this sector globally .

In November 2024, ADNOC awarded contracts worth $196.2 million to 11 local companies, aiming to boost reliance on products manufactured in the UAE .

The report stated that the UAE has witnessed remarkable development in the petrochemical sector with the implementation of several strategic projects to enhance its production capabilities and expand its product range. The most prominent of these projects were: Infrastructure projects for the “Ta’zeez” chemicals and transitional fuels system: “Ta’zeez”, the joint venture between “ADNOC” and “ ADQ” , announced the award of contracts worth AED 7.34 billion to implement engineering, procurement and construction works for a number of essential infrastructure projects in the Ruwais Industrial City in the Al Dhafra region .

These projects include: a dedicated chemicals port to facilitate the export of low-carbon methanol and ammonia, new industrial chemicals produced for the first time in the UAE, and a chemicals terminal that includes storage warehouses, pipelines, an internal pipeline network, and a liquid products storage warehouse .

The project is part of Ta'aziz's efforts to establish a local supply chain for low-carbon chemicals and supports ADNOC's strategy for growth and expansion in the chemicals sector, with the ambition to become one of the top five global producers .

Tazeez plans to begin production in 2027, aiming to produce 4.7 million tons of chemicals annually by 2028. The first phase includes the local production of six chemicals for the first time in the UAE: caustic materials, ethylene dichloride, vinyl chloride monomer, polyvinyl chloride, ammonia, and methanol. The goal is to reduce reliance on imports of these chemicals, enhance local content, and support local industries such as building materials, agriculture, and healthcare .

The low-carbon ammonia production project is part of Ta'aziz's projects to produce low-carbon ammonia with a capacity of one million tons annually to meet the growing demand for transitional fuels and low-carbon chemicals in regional and global markets. Ta'aziz is also working to build a methanol plant in Ruwais Industrial City .

The report indicated that these projects demonstrate the UAE's commitment to enhancing its petrochemical industry capabilities, developing a local supply chain, and supporting economic diversification in the country. The UAE also possesses a unique geographic location that allows it to easily export petrochemical products to Asian, European, and African markets .

Strengthened partnerships with China, India, and Europe are helping develop petrochemical projects and tap into major consumer markets. The expansion is also global, as the UAE plans to invest billions of dollars over the coming years to enhance its production capabilities in emerging markets, particularly in Asia and Europe .

China is one of the most prominent importing markets for Emirati petrochemicals, importing approximately $2 billion from the UAE, representing 12% of the total Gulf petrochemical exports to China. The value of African markets' petrochemical imports from the UAE amounted to $249 million, representing 2.6% of total imports .