The GCC industrial gases market has been witnessing a massive surge in demand. The applications of industrial gases have grown over the last decade in the GCC region as an increasing number of non-petrochemical industries such welding, refining, pulp and paper, and automotive have come up to boost the economy and reduce the dependency of the region on oil exports. Hence, the GCC industrial gases market is expected to value US$1.2 bn by 2022, rising from US$783.7 mn in 2015. The GCC industrial gases market is estimated to grow at a CAGR of 7.3% by revenue in the forecast period of 2016 up to 2022.
Mega Events Boosting Demand for Industrial Gases in GCC
The GCC region will be hosting several mega global events such as Dubai Expo 2020 and FIFA World Cup 2022. This has resulted in the launch of several government development projects to build the required infrastructure for conducting these events, thereby resulting in the rising demand for industrial gases in the region. Adding to it is the demand from current major events such as the Dubai Shopping Festival, Bahrain Formula One Grand Prix, and Qatar Moto GP Grand Prix.
There is expected to be an additional demand from non-oil sectors with the region pushing the development of other industries to reduce their dependence on oil exports owing to the prevalent low oil prices.
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Increasing Production of Petrochemicals Pushing Demand for Industrial Gases
As the production of petroleum and petrochemicals increases, so does the demand for industrial gases in the GCC. The need for cryogenic storage of certain volatile materials and increased government norms and specifications are driving the demand for industrial gases in the GCC region. Industrial gases are widely used in refineries, which are critical for the processing of crude oil.
Also, the increase in petrochemicals production has generated a rise in the demand for industrial gases in the GCC due to infrastructure developments. The need for setting up of subsidiary and alliance industries to complement the petrochemical sector has arisen, leading to an upsurge in the demand for industrial gases and hence boosting the GCC industrial gases market.
Hydrogen Gas Being Considered Probable Source of Alternate Fuel
The rising environmental concerns and perishing reserves of conventional fuel have sparked a frantic search for alternate fuels. Hydrogen, being one of the seven industrial gases, is being probed closely as a probable source of fuel owing to its abundant presence in the atmosphere, greater energy output, and clean burning property that results in water formation.
All factors considered, the demand in the GCC industrial gases market is touted to rise further. The GCC, currently the leading exporter of petroleum and petrochemicals, could shift focus toward alternate fuels, resulting in skyrocketing demand for industrial gases.
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Key market players in the GCC industrial gases market include Praxair Inc., The Linde Group, Air Products & Chemicals Inc., Yateem Oxygen, National Industrial Gas Plants – Mohammed Hamad Al Mana Group, Dubai Industrial Gases, Air Liquide, Gulf Cryo, and Abdullah Hashim Industrial & Equipment Co. Ltd. In March 2016, Mumtalakat successfully acquired a minority equity stake in Gulf Cryo allowing the latter to go ahead with its expansion plans using funds from the latest investments by Mumtalakat.