Dow Chemical oils wheels for Saudi Arabia expansion

Dow

• New Dow president plans gas treatment plant
• Capitalising on demand from Ukraine crisis 
• Calls for more emissions laws in Gulf

The Dow Chemical Company has put Saudi Arabia at the heart of its Middle East expansion strategy, its new regional president told AGBI.

The multinational corporation, which makes chemicals used in everything from oil and plastics to paints and building materials, also wants to capitalise on higher gas demand in the region. 

Moosa Al Moosa, the newly appointed president of Dow Middle East and Turkey, said it was seeing “tremendous growth in the Gulf” and “significant gas expansion” as the region fills the gap created by Europe needing more gas because of the Ukraine war.

• Saudi gas boost to benefit petrochemicals and oil trade
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Previously head of Dow Saudi Arabia, Al Moosa said it is planning new projects in the kingdom after recording a 50 percent increase in revenues there over the past five years.

Dow already owns 35 percent of the Sadara JV chemical complex, a $20 billion joint venture with Aramco in Jubail Industrial City in Saudi Arabia.

New projects include building a methyldiethanolamine (MDEA) plant at the PlasChem Park in Jubail and a chemical coatings and polymers factory with Saudi conglomerate Al Hejailan. 

The MDEA facility will specialise in high-performance gas treating derivatives to meet growing demand for natural gas purification in the Middle East. “The MDEA project can address the growth we’re seeing in the Middle East in natural gas and help with the region’s decarbonisation agenda,” Al Moosa said.

Among the products to be produced is one that removes carbon dioxide from gas, he explained. 

Dow will own 25 percent of the venture, which is intended to complement its existing business supplying the region’s coatings market, including from its Jebel Ali plant in the UAE. 

Al Moosa said it was looking at smaller projects in Saudi Arabia that are “value-add to our existing operations, rather than huge, billion-dollar ventures”. 

Sadura

Dow also owns 42.5 percent of Equate in Kuwait. Equate produces and markets a range of polyethylene products and, alongside Sadara, is the biggest Middle East contributor towards Dow’s bottom line. 

In the UAE Al Moosa is keen to expand Dow’s partnership with DP World by seeking joint investments outside the Middle East, in line with the logistics operator’s international ambitions.

More CO2 emissions laws in Gulf

He also called for Gulf leaders to introduce legislation similar to the Inflation Reduction Act of 2022 in the US, which enshrines in law what he calls a “clear path” to achieving a 30 percent reduction in carbon emissions by 2030.

The law, Al Moosa said, has helped the US attract $500 billion of investments. 

“The Middle East could be the next geographic region for multinationals investing in the low-carbon economy because of its low energy costs and proximity to developing markets,” he said. 

“If the legislation and governance was there, too, to accelerate that – looking at energy transition as a direct foreign investment attractor, not just a cost – we would see a tectonic shift.”

Dow’s revenue fell 27 percent to $11.4 billion in the second quarter of this year, it reported in July, hit by “lower demand and prices due to slower macroeconomic activity”.

Al Moosa said many of the products from the joint ventures are exported to Asian markets including China, with the focus on “maximising profitability while navigating a challenging economic environment”.

China, for one, has not returned to pre-pandemic growth levels.

At the same time, there is significant growth and demand for Dow’s products in India, Africa and other developing markets.

“Saudi could be a great platform from which to export to these other countries,” Al Moosa said.