'The position of the Middle East in world polyethylene supply is changing,' said Roger Newenham, group manager for Jacobs, at the MEED Future Developments in Gulf Petrochemicals conference in London on 24 September. 'The region will become the largest supplier, reflecting the unprecedented scale of capacity investment and rising demand, particularly in China. By 2010, the Middle East will be by far the dominant supplier.'

According to Jacobs' forecasts, the Middle East will add at least 10 million tonnes a year (t/y) of ethylene capacity in the period 2004-2010, driven by the strong competitive advantage offered by Gulf ethane feedstock when the oil price is more than $20 a barrel. More than two-thirds of this new capacity is expected to be used for PE production.

Demand for the product will grow at 5 per cent a year, said Newenham, with Asian demand growth at 6.8 per cent a year.

The Jacobs capacity expansion projections are based on 4.5 million t/y of capacity already under construction at Bandar Imam and Assaluyeh and 1 million t/y under construction in Saudi Arabia as well as a further 2.5 million-2.8 million t/y planned in Iran, 850,000 t/y planned in Kuwait, 2.1 million-2.4 million t/y planned in Qatar, up to 3.8 million t/y of additional capacity proposed in Saudi Arabia and a possible 1.3 million t/y in the UAE.