The United Arab Emirates is rapidly strengthening its position in the global petrochemical supply chain, with output projected to hit 20 million tonnes per year, up from 18.6 million tonnes in 2021. For overseas buyers of polyolefins, specialty chemicals, and low-carbon feedstocks, this signals growing supply reliability, new product availability, and enhanced export logistics from a strategic hub connecting Asia, Europe, and Africa.
Production growth and market outlook
The UAE petrochemical sector is expected to grow 8–10% annually over the next five years, according to the Interregional Strategic Analysis Center in Abu Dhabi, citing data from the Gulf Petrochemicals and Chemicals Association (GPCA). The country aims to boost output of polyolefins and specialty chemicals to meet rising global demand. Borouge reported 2024 profits of USD 1.23 billion, up 24% year-on-year, with sales reaching a record 5.3 million tonnes.
Key expansion projects
Major capacity additions are underway. The "TA'ZIZ" chemicals and transition fuels project in Al Ruwais Industrial City, a joint venture between ADNOC and ADQ, awarded contracts worth AED 7.34 billion for engineering, procurement, and construction. Phase one targets 4.7 million tonnes per year of chemicals by 2028, including six products made locally for the first time: caustic soda, ethylene dichloride, vinyl chloride monomer, polyvinyl chloride, ammonia, and methanol. Production is slated to begin in 2027.
Strategic acquisitions and global partnerships
ADNOC completed its USD 13 billion acquisition of German advanced chemicals producer Covestro, expanding its specialty chemicals portfolio and market access. Together with Austria's OMV, ADNOC merged petrochemical assets to form Borouge Group International, valued at USD 60 billion, making it the world's fourth-largest polyolefins producer. In November 2024, ADNOC awarded USD 196.2 million in contracts to 11 local companies to boost domestic manufacturing.
Export infrastructure and logistics
TA'ZIZ is building a dedicated chemicals port to facilitate exports of low-carbon methanol, ammonia, and new industrial chemicals. The port will include storage tanks, pipelines, and a liquid-products warehouse. These investments strengthen the UAE's role as a logistics hub, leveraging its geographic position to serve Asian, European, and African markets efficiently.
What buyers should watch
Overseas importers should monitor the ramp-up of TA'ZIZ production from 2027, which will introduce new supply sources for PVC, methanol, and low-carbon ammonia. China remains the top export market, importing USD 2 billion worth of UAE petrochemicals (12% of Gulf exports to China). African markets imported USD 249 million from the UAE. The UAE's push into specialty chemicals and low-carbon products may offer alternatives for buyers seeking diversified, sustainable sourcing options.
Source: Read the original report | Published: March 29, 2025