Saudi Arabia, UAE Oil Giants Plan to Sharply Increase Chemical Output

State-owned oil companies from both Saudi Arabia and the United Arab Emirates told a conference this week that they plan to nearly triple their production of chemicals in coming years.

Bloomberg reports that the goals set by Saudi Arabian Oil Co., or Saudi Aramco, and Abu Dhabi National Oil Co. — Adnoc — are part of broader efforts by those nations to diversify their economies beyond oil.

The emphasis on petrochemicals, in particular, is aimed at markets in Asia, where a growing middle class is expected to translate to sharp increases in demand for consumer goods — and, as a result, for plastics.

“By 2030, Asia will become the main driver of global economic growth and will also represent the world’s largest market for consumer goods,” Adnoc CEO Sultan Ahmed Al Jaber said at the event, according to Bloomberg.

Adnoc plans to increase its production of petrochemicals from the current 4.5 million tons per year to 11.4 million tons by 2025.

Saudi Aramco, meanwhile, intends to shift from 12 million tons of petrochemical production this year to 34 million tons by 2030, according to company officials.

Aramco and fellow state-owned operation Saudi Arabian Basic Industries Corp. earlier this year announced plans to study the possibility of constructing a chemical plant in the western coastal city of Yanbu.

SABIC officials, Bloomberg reported, told the conference that Persian Gulf oil companies could need to explore mergers in order to compete with U.S. chemical makers, who were buoyed by the rise of fracking — and the resulting abundance of natural gas — in North America in recent years.