Eurasia’s petrochemical industry is poised for transformative growth, according to an industry report from the Eurasian Development Bank (EDB).

Countries in the region have begun investing in the sector as they hope to make use of their extensive hydrocarbon resources, move up the value chain, and supply themselves with plastics that are still largely imported into the region.

“With the potential for the value-added products to increase twentyfold from raw materials to final polymer products, the region is looking to shift from being primarily a raw material supplier to becoming a global hub for polymer production,” the EDB said in the report.

Eurasian petrochemical production value added x20

Despite currently accounting for only 2.1% of the global petrochemical market, the Eurasian region is set to capitalise on its substantial oil and gas reserves, which include 115mn barrels of oil and 62.8 trillion cubic metres of gas. This positions the region favourably against a backdrop of increasing demand, particularly from the developing economies of the Asia-Pacific region and India.

"The Eurasian region’s rich resources combined with its strategic proximity to the fastest-growing markets in Asia present a unique opportunity for economic transformation through the petrochemical industry," the EDB says.

The region’s governments are actively promoting the expansion of the sector, with over 20 major petrochemical projects underway, valued collectively at over $200bn.

The newest project to break ground is in Uzbekistan, the massive $4bn Gas Chemical Complex MTO (methanol to olefin) Central Asia Karakul Complex, a petrochemical complex near the ancient Silk Road of Bukhara to supply the republic with plastic and reduce its dependency on imports.

By 2035, the collective Eurasian initiatives are expected to more than double current polymer production to over 20mn tonnes annually and could increase the region’s GDP by up to 0.44 percentage points annually.

Eurasian petrochemical production projected growth and exports

"The economic benefits of expanding the petrochemical sector are clear, with projections showing a potential addition of $153.5bn to the region’s GDP by 2035, alongside a significant boost in exports," the EDB added.

The proposed strategy includes the creation of modern petrochemical clusters near major hydrocarbon reserves and the adoption of innovative, small-scale production techniques. Additionally, environmental considerations are paramount, with a focus on integrating circular economy principles to ensure sustainable industry growth.

To support these ambitious plans, the region is exploring partnerships with multilateral development banks to secure the necessary investments and to facilitate the development of the sector through a variety of financial instruments.

“With the petrochemical industry at a pivotal point, the Eurasian region’s strategic initiatives could set a precedent for economic development driven by enhanced industrial capability and international cooperation in the face of global structural changes,” the EDB said.

Eurasian petrochemical production economic benefits