Regional petrochemicals production capacity grew 13.5 per cent last year, according to the Gulf Petrochemicals and Chemicals Association (GPCA) annual report.

Production rose to nearly 116 billion tonnes, up from 102bn tonnes in 2010, on the back of further expansion of manufacturing facilities.

Saudi Arabia accounted for more than half of $ 100bn in sales generated by the GCC petrochemicals sector, with Saudi Arabian Basic Industries Corporation (Sabic) posting revenues in 2011 of $ 50.64bn and a net profit of $ 7.8bn.

The report provides a comprehensive overview of the major sector developments in each of the Gulf states.

It describes 2011 as a year of consolidation after the demand slump caused by the 2008 economic downturn, with the industry recording sales and revenue growth and progress in the development of new projects.

"Continued investment and significant new agreements demonstrate the leading role the GCC petrochemicals sector is playing worldwide," said GPCA secretary general Dr Abdulwahab Al Sadoun.

"The GPCA is pleased to announce this market growth and to recognise the contribution of every industry player across the region.

"We are optimistic about 2012, despite the gloomy economic forecast in European and overseas markets, due to the continued focus on technology, innovation and long-term partnerships," Dr Al Sadoun added.

One of the most significant projects announced last year was Sadara Chemical Company, a joint venture between Saudi Aramco and Dow Chemical Company, signed in October.

It will develop 26 manufacturing units specialising in polyurethanes and other high-performance polymers.

In Bahrain, Neste Oil, Bapco and nogaholding have successfully started commercial production at a new base oil plant.

The joint venture plant produces premium quality oils for use in blending top-tier lubricants. "The entry of industry leaders such as Kuwait Petroleum Corporation and Sabic into China through the signing of large-scale petrochemicals joint ventures is another positive trend for the GCC sector," Dr Al Sadoun added.