Future of petrochemicals in Kuwait

30/08/2025

THE repeated question in Kuwait is: Why do we lag behind the rest of our neighbors in the petrochemicals field, although we were the first in the region to do so exclusively with local inventors? We have invested in Europe, the USA, and more recently in South Korea. We are exporting and providing such countries with Kuwaiti feedstock (raw material) -- mainly naphtha. We sell to petrochemical companies that use our feedstock to generate a variety of products derived from ethylene, all made from Kuwaiti naphtha sourced from our three main refineries.

So, why are we not producing and operating ethylene plants in Kuwait? What are the obstacles? Why not even invite some of the naphtha buyers to invest jointly with us? Or perhaps, it simply never occurred to us. But is it not time to consider this? There are four main feedstocks for petrochemical production: butane, propane, gas, and naphtha. The countries in the region with high reserves of gas are Qatar, Abu Dhabi, and Iran. At present, Kuwait is importing gas from Qatar under a 15-year term contract, with four million tons of gas annually, followed by imports from Nigeria at 1.1 million tons and from the USA at 700,000 tons per year.

Kuwait was the first country in the region to import gas through long-term contracts. These supplies are essential to meet our high electricity demand, particularly during the intense heat of our summer months. Yet, we export more than three million tons of naphtha annually — the main feedstock used to produce ethylene, which is the backbone of the petrochemical industry. If that is the case, then why are we not investing in establishing and building a petrochemical complex here in Kuwait? Why are we not producing ethylene locally from our own naphtha? Have we not considered this? Why? At the same time, we continue to invest in this same industry abroad and buy shares in foreign companies.

To our understanding, more than three companies have approached us with proposals to create joint ventures in this sector. Yet, we declined—without clearly understanding the reason these ventures were turned down. Is it still not the right time to investigate or to reconnect with those interested parties? Meanwhile, we continue to enjoy an excellent partnership with Dow Chemical through our joint venture in Equate, which is generating strong profits and healthy cash returns. This kind of partnership should be encouraged and replicated with other investors.

As long as we have the feedstock and are selling it to others, we should aim to maximize the returns and reap the rewards for ourselves, here in Kuwait. Without a doubt, investment in petrochemicals is profitable, particularly when using mixed feedstocks like gas and naphtha. Therefore, we should encourage and invite foreign investors to come and invest with us here, in our own country. Since we were pioneers in establishing the first petrochemical company in Kuwait, the time has come to repeat this achievement.

We must utilize our locally produced naphtha to maximize its value-added potential—provided, of course, that the economic aspects and expected returns are good. The simple principle remains: No returns, no project. However, allowing others to maximize their returns from our own products is unacceptable. It is now time to seriously assess our petrochemical industry and ensure we are not falling behind others. We possess the raw materials and we should take advantage of them for maximum return. Why should others profit from our feedstocks and benefit from our resources? If the buyers of our naphtha are making profits, then we in Kuwait should be doing even better. By Kamel Al-Harami, Independent oil analyst Email: [email protected]