Kuwait is set to shift its focus onto petrochemical production and develop the industry to an extent that it accounts to 50 percent of the country's income generated from sectors other than oil. According to a new report by Business Monitor International (BMI), in order to achieve its target Kuwait's Petrochemical Industries Company (PIC), a subsidiary of the national oil company Kuwait Petroleum Corporation, will have to invest in development of value-added products, so that the effect of competition from international markets is mitigated.

The report lists a number of factors that could have a positive influence on the country's petrochemical industry, such as its abundant reserves and its upstream production growth, as well as a wide range of feedstocks that could boost downstream production, as opposed to Saudi Arabia and Qatar, which rely exclusively on ethane.

However, the industry also faces a number of challenges. The state plays too large a role in upstream and downstream sectors, which is an obstacle for international investors and, as a result, Kuwait's export development potential is stifled.

The BMI report noted that petrochemical complex Equate, which accounts for the majority of Kuwait's non-oil exports, is working at above-average capacity, suggesting that there is an open market for its production internationally. It is predicted that the company will further expand its high-density polyethylene/linear low-density polyethylene capacity and will invest in a new MEG unit, planned for completion next year.