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GCC governments’ plans to diversify their economies by developing large-scale petrochemicals projects are being challenged by the North American shale gas boom, says UN agency Unctad.
The agency’s World Investment Report 2014 (see p20) says that “the shale gas revolution in North America, combined with gas shortages in the GCC region, has reduced the cost advantage of the GCC petrochemicals players and introduced new competition.”
By driving down gas prices, the shale revolution is reviving the US petrochemicals sector and impacting the global strategies of transnational petrochemicals firms.
Global players that have made multi-billion dollar investments in the GCC in the last 10 years, including Chevron Phillips, Dow and ExxonMobil, are again considering major projects in the US. Both Chevron-Phillips and Dow are planning major ethylene and polyethylene projects in Texas.
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