Chemicals producers look to cut spending
27 February 2026
Following significant capital expenditure (capex) on petrochemicals and specialty chemicals projects in the first half of this decade, chemicals producers in the Middle East and North Africa (Mena) region are expected to reduce spending in 2026 – and perhaps beyond.
Two primary factors are understood to be behind this anticipated drop. With the bulk of their projects under execution and on course to enter operations between now and the end of the decade, both state-owned and private chemicals producers appear to be set to achieve their short- to mid-term capacity expansion goals.
Also, with subdued global petrochemicals and chemicals demand putting sales margins under pressure, regional players are looking to rein in spending in order to remain profitable.
Steady spending
An estimated $71bn-worth of petrochemicals and specialty chemicals projects are in the engineering, procurement and construction (EPC) stage in the Mena region, with main contracts for the majority of these projects having been awarded in 2020-25, according to data from regional project tracker MEED Projects.
The biggest chemicals project under EPC execution is the $11bn Amiral project in Saudi Arabia, which represents the expansion of Saudi Aramco Total Refining & Petrochemical Company (Satorp) in the petrochemicals sector.
Satorp, in which Saudi Aramco and France’s TotalEnergies hold 62.5% and 37.5% stakes, respectively, operates a crude refinery complex in Jubail that has the capacity to process 465,000 barrels a day (b/d) of Aramco’s Arabian Heavy crude oil grade to produce refined products such as diesel, jet fuel, gasoline, liquefied petroleum gas, benzene, paraxylene, propylene, coke and sulphur.
Integrated with the existing Satorp refinery in Jubail, the Amiral petrochemicals complex will house one of the largest mixed-load steam crackers in the Gulf, with the capacity to produce 1.65 million tonnes a year (t/y) of ethylene and other industrial gases.
This expansion is expected to attract more than $4bn in additional investment in industrial sectors including carbon fibres, lubricants, drilling fluids, detergents, food additives, automotive parts and tyres.
Another large-scale project under execution is the Al-Faw integrated refinery and petrochemicals project in Iraq. State-owned Southern Refineries Company brought on board China National Chemical Engineering Company in May 2024 to develop the estimated $8bn project.
The Al-Faw project is being implemented in two stages. The first phase involves developing a refinery with a capacity of 300,000 b/d and will produce oil derivatives for both domestic and international markets. The second phase relates to building a petrochemicals complex with a capacity of 3 million t/y.
EPC works are also progressing on the estimated $6bn Ras Laffan petrochemicals complex in Qatar, which will have the largest ethane cracker in the Middle East. The project is being developed by a joint venture (JV) of QatarEnergy and US-based Chevron Phillips Chemical (CPChem). QatarEnergy owns a majority 70% stake in the JV while CPChem holds the remaining 30%.
The Ras Laffan petrochemicals complex is expected to begin production this year. It consists of an ethane cracker with a capacity of 2.1 million t/y of ethylene. This will raise Qatar’s ethylene production potential by nearly 70%.
The complex includes two polyethylene trains with a combined output of 1.68 million t/y of high-density polyethylene polymer products, raising Qatar’s overall petrochemicals production capacity by 82% to almost 14 million t/y.
A JV of South Korean contractor Samsung Engineering and CTCI of Taiwan was awarded the EPC contract for the ethylene plant, which is understood to be valued at $3.5bn. The EPC contract for the polyethylene plant was awarded to Italian contractor Maire Tecnimont, which said the value of its contract was $1.3bn.
Decisive period
More than $61bn-worth of petrochemicals and specialty chemicals projects are in pre-execution stages in the Mena region, according to MEED Projects, although contracts for less than a quarter of these schemes are set to be awarded in 2026.
The largest capex programme in the regional chemicals sector that is expected to make progress this year is Saudi Arabia’s liquids-to-chemicals programme, the aim of which is to attain a conversion rate of 4 million b/d of Aramco’s crude oil production into high-value chemicals.
Aramco has divided its liquids-to-chemicals programme into four main projects. The company has signed JV investment agreements with foreign partners this year for the four projects, which involve:
> Converting the Saudi Aramco Jubail Refinery Company (Sasref) complex in Jubail into an integrated refinery and petrochemicals complex with the addition of a mixed-feed cracker. The project also involves building an ethane cracker that will draw feedstock from the Sasref refinery. Front-end engineering and design (feed) work on the project is under way and is being performed by Samsung E&A.
> Converting the Yanbu Aramco Sinopec Refining Company (Yasref) complex into an integrated refinery and petrochemicals complex with the addition of a mixed-feed cracker. China’s Sinopec is a JV partner in this project.
> Converting the Saudi Aramco Mobil Refinery Company (Samref) complex in Yanbu into an integrated refinery and petrochemicals complex with the addition of a mixed-feed cracker. US oil and gas producer ExxonMobil, Aramco and Samref signed a JV framework agreement in December to begin preliminary feed work on the project.
> Building a crude oil-to-chemicals complex in Ras Al-Khair in the kingdom’s Eastern Province. Progress on this project has been slow.
Separately, Aramco subsidiary Saudi Basic Industries Corporation (Sabic) is in advanced negotiations with bidders for a project to build an integrated blue ammonia and urea manufacturing complex at the existing facility of its affiliate, Sabic Agri-Nutrients Company, in Jubail.
The estimated $2bn-$3bn project is known as the low-carbon hydrogen (LCH) San VI complex. The project is part of Sabic’s Horizon 1 LCH programme.
The planned San VI complex will have an output capacity of 1.2 million metric tonnes a year of blue ammonia and 1.1 million metric tonnes a year of urea and specialised agri-nutrients.
Qatari project
QatarEnergy, meanwhile, is pressing ahead with a project to expand its low-carbon ammonia and urea potential by building a production complex in Qatar’s Mesaieed Industrial City. The planned facility will have a total output capacity of 6.4 million t/y and is understood to be the eighth expansion phase of QatarEnergy’s fertiliser production complex in Mesaieed.
QatarEnergy issued the main EPC tender for the blue ammonia and urea production facility expansion project last July and set a deadline of 15 April for contractors to submit bids. The state energy enterprise is expected to award the main contracts for the project by the end of this year.
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