Market Trends of United Arab Emirates Oil and Gas Downstream Industry
This section covers the major market trends shaping the UAE Oil & Gas Downstream Market according to our research experts:
Refining Sector to Witness Significant Growth
- The United Arab Emirates is one of the largest oil and gas producers in Middle East & Africa. According to the Organization of Petroleum Exporting Countries (OPEC), as of 2021, the country had around 2.718 million barrels per day of crude oil production compared to the 2019 value (3.058 million barrels per day).
- In contrast to the oil and gas CAPEX scenario of Saudi Aramco, the United Arab Emirates (UAE) is making significant investments in its domestic oil and gas sector as part of the country's growth strategies. For instance, in November 2020, the Supreme Petroleum Council (SPC) of Abu Dhabi approved the UAE state-run oil company Abu Dhabi National Oil Company's (ADNOC) USD 122 billion CAPEX program for 2021-2025. The approval of the CAPEX plan was followed by SPC's announcement of 22 billion barrels of recoverable unconventional oil resources and an addition of two billion barrels of conventional oil reserves.
- The refining throughput capacity of the United Arab Emirates has shown significant growth, with 643 thousand barrels per day in 2014 and 939 thousand barrels per day in 2021. With this trend, the refining market is expected to grow considerably.
- Middle East & Africa is one of the fastest-growing regions in terms of refining frastructure in tandem with an increase in crude oil and natural gas production and rising demand from end-users.
- With vast natural gas and oil reserves and large refining capacity, the United Arab Emirates is expected to show significant growth in the coming years.
Understand The Key Trends Shaping This Market
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Government Initiatives and Upcoming Projects to Drive the Market
- The total export volume of refined petroleum products in Abu Dhabi has shown continuous growth. For instance, Brooge Petroleum & Gas Investment Co. is building a refinery with a capacity of refining 250,000 barrels per day, designed to produce bunker fuel in Fujairah. With such new projects, the downstream market is anticipated to grow in the future.
- As of June 2022, around 35 active onshore and 13 offshore rigs were operating in the country's offshore areas. Natural gas production in the country reached 57 billion cubic meters in 2021.
- Expanding ADNOC's downstream activities is integral to its 2030 Integrated Strategy. ADNOC is investing USD 45 billion in upgrading its downstream operations, utilizing existing assets, and making new downstream investments to increase its market share.
- For instance, in April 2022, Reliance Industries (RIL) and Abu Dhabi Chemicals Derivatives Company RSC (TA'ZIZ) signed a shareholder agreement regarding the construction of a chemical plant in Ruwais, Abu Dhabi. In addition to its significance, the development will focus on the production of Chlor-alkali, ethylene dichloride (EDC), and polyvinyl chloride (PVC), which are widely used in a wide range of industrial applications.
- In December 2021, Maire Tecnimont secured three EPC contracts worth around USD 3.5 billion for the Borouge expansion project. Under this contract, the company would develop three units in the Borouge 4 project, two polyethylene units with a capacity of 700,000 tons per annum and one 1-hexene unit. The project is expected to be completed by 2025. Therefore, increasing investments and upcoming projects in the downstream segment are expected to drive the UAE EPC market during the forecast period.
- The oil and gas downstream market is expected to grow considerably with upcoming deals and contracts of the government and the increasing interest of international companies.
